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Do you have a savings account? How many savings accounts do you have? Would you believe it if I told you we currently have 13 savings accounts and are still adding more? Let me explain why we have so many savings accounts and how it works for our family.
First of all, it’s important to know that all of our savings accounts are in one place – at Capital One 360. Capital 360 is a FDIC insured online banking program that links directly to your checking account.
We do have one savings account at our bank but the other 12 accounts are located at Capital One 360. For us, our electronic savings accounts serve as our digital envelopes. If you are familiar with Dave Ramsey, you’ll understand what I mean. Having so many different savings accounts allows – and encourages – us to put money towards a specific purchase.
The savings account that we have at our bank serves as our personal overdraft protection from surprise bills. We keep just a little bit in there so we can move money around as necessary when it’s time to pay our bills. We’ve found that this type of slush fund works well for us.
After that, the rest of our savings accounts are at Capital One 360. We use them for several reasons.
First of all, it’s convenient that our accounts can be accessed anywhere but the online aspect keeps us in check. We can’t drive to the bank and withdraw the money we are saving. We have to plan for our purchases since it has a 3 to 5 day transfer delay to our bank. You can transfer between Capital One accounts instantaneously however.
We also like Capital One because it links to our checking account. We have set up automatic transfers from our checking to a couple of our Capital One accounts. It’s nice to have savings on autopilot.
Finally, Capital One gives more interest than most accounts. I’ve seen several accounts that are at 0.01 percent interest. Capital One is currently at 0.75 percent interest. No, it’s not a lot compared to investments in mutual funds, but these accounts are for specific savings goals that we want to be able to access at anytime. Knowing that, it’s still good to be making a little bit in interest.
Now, am I suggesting that you should run out and open 13 savings accounts of your own? By no means! We started with our emergency fund and have slowly added accounts as the need arises. What I love about having so many different savings account is that I’m no longer tempted to take from a specific savings account when it’s already earmarked for a specific goal. What goals are important to you? What do you specifically want to save for? Start by answering those questions and setting up corresponding savings accounts.
It’s also important to know that we don’t add to all 13 of our savings accounts every month. Some we budget $100 a month for while others we add only $25 when we can. Several of our savings accounts are built solely by extra income that we earn. There is no certain amount that you have to save. The most important thing about saving is simply that you are saving.
So you can understand how this works for us, here are the savings accounts that we currently maintain.
The first, largest and most important savings account we have is our emergency fund. We are almost fully funded with 3 months of our living expenses. I’ve very eager to reach that goal! It is amazing how an emergency fund helps me sleep better at night. I know God is in control but I also know we are called to be good stewards of all He has given us. For that reason, we plan and prepare for the emergencies that will happen at some point in time. If you don’t have anything set aside in an emergency fund, set yourself a goal of $1000. After you reach that point, increase it to 3 to 6 months of living expenses.
The second most important savings account we have is a slush fund for our bills. We budget for our monthly bills but we all know that utility bills fluctuate. Having a cushion in this bills account means we are prepared for those overages whenever they come. This account also allows us to set aside the money for bills that are due quarterly or once a year, like our car insurance payments.
We have also set up a separate savings account for car repairs. After new tires on the Tahoe and a new alignment last month, that savings account is currently down to only $4.73. I am so thankful we had the money set aside for these recent car repairs! We have budgeted some money every month to replenishing this account because there are always car expenses for which to pay!
Along similar lines, we are also saving in our car fund account. We made our last car payment in February (best Valentine’s gift ever!) so we are now driving two cars that are completely paid for. Both cars have over 150,000 miles on them but we are planning to drive them for many more years. That said, we are working at tucking away little bits of money into this account. Even buying used cars, I would love to never have another car payment…so we are saving for that goal!
We also have a savings account for house projects. Goodness knows, the list never ends! Our current summer projects include putting a new floor in the kitchen and updating our green tiled main bathroom. We’ve been setting money aside for these projects for quite some time. We continually add to this account because as soon as we finish one project, there is another one on the list. Any other homeowners feel that way?
As soon as our son was born, we set up a savings account for Nathan. Any money gifts that he receives, we place straight in his savings fund. We have considered starting a college fund but until we finish researching and make our decision, his money is set aside.
My husband is a Colts season tickets holder so he has a Colts savings account. He sells glow sticks over the 4th of July and earns money selling extra tickets so he can continue watching his beloved Colts play. Very minimal money comes out of our budget for this expense but we do have to plan ahead so he can pay for the tickets ahead of time. Your husband may not be a Colts fan but if you or he have a hobby that costs money, having a savings account for that expense is helpful.
I teach piano lessons on the side so my income goes into a piano earnings savings account. From this account, I move money into the other savings accounts where it is needed and cash out some for the categories in our budget that depend on the money I earn.
I’m excited that I finally have a savings account for my blog earnings. Since I started selling custom books and now that my humble little blog is growing in size, I am actually earning money from blogging! I’m thrilled to be able to contribute to our family by blogging. At this point in time, most of the money in this blog savings account is reinvested into the blog but some has gone into our emergency fund so we can fully fund that account sooner rather than later.
We have a savings account for our summer vacations. We save our gas rebates during the year to cover our driving costs but we also set aside money for other vacation expenses. Since traveling is the only way to see my spread-out family, vacations are something we choose to spend our money on.
We also have a little bit put aside in a Christmas gift account. I do other things throughout the year to earn Amazon gift cards that I can spend on Christmas gifts. We shop year round for good deals on Christmas gifts that fit for our family. It’s a simple way of making this savings account go further.
Our final savings account doesn’t have much in it yet but it’s a savings account for our someday Alaskan cruise. I don’t know when we’ll go but we are saving to make that dream a reality. When we get surprise gifts, I try to tuck a little bit into this account as we keep dreaming of visiting Alaska.
I believe it is a necessity for every family to have money in savings. The where and how much is up to you to determine. I hope reading how we use our different savings account has given you some encouragement to work towards your savings goals.
I’d love to know how many savings accounts you have. Also, what are you saving towards right now?
(If you are interested in checking out Capital One 360 for yourself, this is my referral link. You are by no means obligated to use it. I’ve been asked about how and where we save so wanted to share this article. Referral or not, I would highly recommend Capital One 360!)