A few years ago I was at a friend’s going away party and she pulled me over to meet her mom. When she introduced me, her mom instantly replied, “Oh you’re the one who helped Lauren set up all of her savings accounts!”
Errr….I guess so? Is that really how I want to be known? Whatever, I’ll take it.
Yes, somehow it had come up in a conversation with Lauren that I like to have a lot of savings accounts. And I showed her exactly what I did to set them up and how I was going to use them in the future. The day that I realized I could have as many savings accounts as my little OCD heart desired, was the best day of my life.
Not because I love saving (though part of me does like to make a little game out of it). But because I love saving for very specific goals.
Money is meaningless unless you have goals that excite you.
For a while my goals revolved around getting out of $120k in student loan debt, and what my life could look like if I was free. Today, they look a bit different.
What hasn’t changed is the fact that I create a bank account for each very specific goal that excites me. And in the last year we’ve added a new savings account to the list, which I’m completely obsessed with (because it’s for a goal I’m obsessed with). I’ll go into that one at the end, because I’ve recently realized just how important it is.
How many savings accounts do you need?
Here are the savings accounts we currently have:
Vacation savings: living in Europe we’ve become really good at going “on holiday” (it’s not a “vacation” here). As such, we needed to have a vacation account that we could put money into monthly and pull from consistently when those large credit card bills came in. Full disclosure, it’s a sad little account right now because we’ve been traveling too much. The photo on this post was from a trip 2 years ago where we completely drained this account and had to put ourselves on a travel time out for quite a while.
House savings: this is the savings account for the house that we own. There’s not much in it, but we save monthly for our bi-annual property tax payments. Someday, when it’s a priority or we’re suddenly making more, I’d like to start putting away cash for renovations. I want to pretend that I’m on an HGTV show and totally makeover my home. But as of now? There’s not much going on in here.
Down payment savings: because we want another house. So badly. I have a photo of it. I think about it almost daily. It won’t happen for a long (long, long, long) time, but having this account helps me feel like we’re inching closer.
Emergency fund: we keep roughly 5 months of expenses in this account. I like to have 6 months in here (or more), Jordan likes to have 3.
Business savings: mainly just to pay the tax man or anything big that I know is coming up.
And the most important account to me right now:
F-Fund: the best, most amazing account we have.
So what is this F-Fund, you ask? That’s a great question. The “F” stands for “freedom” or “fun” or a 4 letter F word.
This is the fund that you can use if you need to get out of a situation. If you need to leave a job, a living situation, or just need a break. It can be savings for a future business that you want to start, so you can finally live your dreams. It can be anything.
The point is, it’s that one account that you know you can spend on anything.
We started this account when I realized one day that we had a little extra in our checking account at the end of the month. I figured I would transfer it to one of the savings accounts that we already had – or possibly spend it on shoes.
When I wasn’t excited about either possibility, I started to think about what was missing from our savings safety net.
Two years ago I walked out of a job that wasn’t right for me. It was terrifying and I was so thankful we had emergency savings to fall back on. But honestly, I stayed longer than I should have. I didn’t want to dip into our emergency savings. That was for a real emergency. Not just an “I hate my job and I need to leave now,” situation. To me, that wasn’t an emergency.
But when I found myself in a taxi on the way to the hospital mid-panic attack, I had to lean on our emergency fund to make up for the fact that I was suddenly without a paycheck. And that, in itself, was stressful.
I realized that if I had a little extra cash stashed away for me to walk out the door and say “fork it, my health comes first,” I probably could have avoided some really dark months (no profanity here. My mom reads this, people. But you can imagine what I really wanted to say.)
Once I pieced that together I opened the Fork It account. This account doesn’t get the regular attention that the other accounts do, because I don’t have a specific timeline or goal for it. But right now it’s getting my extra cash cushions and any windfalls that come our way.
Surprisingly, it’s trucking along quite nicely and I know it will be there the next time Jordan or I really, really need it.
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