[PAPERS SHUFFLING]
I used to have just one account for savings, an emergency fund.
While that generally worked, I found
myself raiding the account for irregular expenses
and not all of them were true emergencies.
Semi-yearly car insurance payments or repairs, taxes due,
new furniture or toys, those all took me by surprise,
even though they shouldn't have.
I eventually admitted that I was bad at keeping
a buffer of extra money in my checking account
and I needed to set aside money where I couldn't see it.
Over the years, stable jobs and changing priorities
meant that there were goals I wanted
to reach beyond not panicking when my car insurance was due.
These were big goals I would have
to plan for, maybe even for years,
like international travel or a house down payment.
Those desires drove me to open new accounts
with separate goals and shift around my savings strategies.
Right now, I have seven different savings accounts
with an online bank.
Account number one, emergency savings.
Priority, highest.
Strategy, maintain at all costs.
This is my safety net against the unpredictability
of the world.
I've stashed away four months of expenses here based
on my normal spending patterns, not
my "holy shit I lost my job" spending patterns.
And it is the absolute last place
I draw from when I need extra cash.
It is strictly for emergency emergencies
and I'm lucky enough that I haven't
had to touch it in over a year.
I'm not currently contributing to this account,
though I have been thinking about trying to up this to six
months of expenses.
Whenever I have to draw from this account,
all other transfers to savings are
halted until the spent money has been restored.
Account number two, adventure savings.
Priority, low.
Strategy, drain and refill.
My best friend and I take an international vacation
every other year in place of one of our birthday visits.
In preparation for this, I've been banking money and vacation
days for our next trip, the Osaka/Kyoto region of Japan.
Right now, this account sits pretty at about 10%
of my yearly salary.
Even though my friend and I are coming in under budget
for our trip, I imagine I'll still
spend a good chunk of this money by the end of it.
Right now, I don't contribute any more to this account,
but I'll need to devise a strategy for topping it
back up once the trip is over, so I'll
be ready for our next adventure.
Account number three, car-related expenses.
Priority, medium.
Strategy, build, but regularly tap.
This is the account where I save for everything car-related
except gas.
Car insurance, registration, oil changes, overdue maintenance,
all of those things come out of this account.
Like today, for example, when I paid $739 for all the things
I just listed.
I'm headed out on a road trip in the near future
and would like to not be stranded in the desert.
Thanks.
I am actively contributing to this account
to the tune of $277 a month.
Since I haven't had any true car-related disasters
in a while, I have been accumulating
and hope to continue accumulating a surplus.
The goal is to one day use the surplus money
to buy my next car in cash.
Account number four, house down payment goal.
Priority, high.
Strategy, build and build and build.
I'll be honest, I'm not even sure I want a house.
And I am unwilling to raid my savings or retirement
accounts for a down payment when I'm not
certain I'll stay in my area.
Still, I want to be positioned for the opportunity
to buy someday.
And that means I need money for a down payment,
closing costs, et cetera.
I'm putting $300 a month into it for a slow, steady climb
to $3,600 by the end of the year.
The goal is to never touch this account
until it's time to spend on a home
or until a change in priorities means
I need to use the money for something else.
Account number five, luxury spending.
Priority, low.
Strategy, toss in extra and wipe it out.
Computers grow obsolete.
New toys appear on the marketplace.
You get really tired of your fresh out
of college aesthetic furniture.
I've got a list of big ticket items
I want to buy eventually as upgrades to what I currently
have, but there's no rush.
I'm biding my time, waiting for the perfect version
of those items to cross my path.
And when they do, I'll buy them straight away,
secure in the knowledge that I have this account
to cover the expense.
I don't have a specific goal for this account,
but I toss in money whenever I have some cash left over
at the end of the month.
One day, I'll find a dresser I love at the price I'm
willing to pay, damn it.
Account number six, holiday savings.
Priority, medium.
Strategy, drain and refill.
The spreadsheet I used last year to track my Christmas gift
giving spanned 7 columns and 37 rows.
I have a huge family and several friends
scattered across the globe.
And it's important to me that I give them all presents
if I'm able.
There are also always miscellaneous
holiday or charity events either at work or in my community
that I like to participate in without any financial stress.
In years where I lived in a different state than my family,
I also used this fund to pay for plane tickets to visit.
To that end, I currently set aside $80 a month
throughout the year and intend to bleed
the account dry in December.
If money is tight in a given month though,
this is the contribution I skip first, which I have already
done this year.
This account lets me enjoy an extravagant and generous
holiday season without waking up with a credit card
hangover in January.
Account number seven, saving for taxes.
Priority, low.
Strategy, drain and refill.
Taxes come like clockwork every February
and I never get a refund.
I often had to reach for my emergency savings
or contribute less to other financial goals
the month I filed and it was always frustrating.
I got fed up with it last year and opened this account
specifically to cover any taxes owed.
While I still didn't save quite enough for my last year taxes,
I was able to cover more than half
of what was due on this account.
This year, I'm earmarking an even higher percentage
of my freelance pay, which is irregular and variable,
for this purpose.
Maybe I'll get the math right this time.
Looking at the infrequent but high cost expenses that
popped up in my life repeatedly it
was a great way to decide what kind
of short and mid-term savings accounts I should open.
Lifestyle priorities, like holiday spending and travel,
prompted me to open even more.
Seven feels like the perfect number of savings accounts
for me right now.
But who's to say that's all I'll need in the future?