I am a lot more motivated to save when I know that I'll one day be able to reap the rewards with a new car or a special trip. Several years ago, I began labeling my different savings and investment accounts with specific goals. According to a recent article by MoneyMagazine on ways to trick yourself into getting richer, people who attach goals to their savings accounts save 31 percent more money than those who don't. It makes sense to me. When I tried to save 10 percent of my income just because that's what I heard I'm supposed to do, I usually fell short. I found excuses for dipping into my savings because I had no solid goal or reason for guarding my savings. For me, the personalized savings account replaces the need for a large emergency fund.
The car fund
We use the money in our car fund for car repairs, maintenance and for future car purchases. To figure out how much we should save for our car fund, I looked at the previous year statements to see how much money we spent on oil changes and repairs. We added the yearly car maintenance costs with the equivalent of a monthly car payment. In another 3 years, we should have enough money to buy a car with cash if we need to.
The vacation fund
Our vacation fund is one of the newest savings accounts I opened so we do not have much saved in it right now. However, I found we are more motivated to work knowing that we will be able to go on an enjoyable vacation at the end of the year. We researched different vacation destinations so we could have a specific image in our mind of the goal. We decided to focus on saving money for a trip to the Bahamas to go snorkeling and swim with the dolphins.
The college fund
Our college fund is a more practical fund, but a necessary one. We save money for each of our children as well as ourselves. After the Great Recession, we noticed a lot of our former colleagues and friends had to return to college to become retrained in a new field. Whether I want to get a master's degree or a second bachelor's degree, I may need money to return to college down the road.
The house fund
I like the security of having money in savings to cover our mortgage payments in case of a financial emergency. I try to save the same amount of money we used to save when trying to come up with a down payment on our home purchase. I figure if we could make the financial sacrifices then, we can make it now. Since we make more money than we did 8 years ago, the truth is it's not as much of a sacrifice anyway. We also use money from our house fund to pay for new paint, new appliances and upkeep such as having the house pressure washed.
In addition to labeling my savings accounts in my notebook, I am also able to name my accounts online. I am able to change the account names whenever I want so I update them as my savings goals change. Perhaps one day I'll replace my "Bahamatrip" with "Eiffeltowertrip."
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