Save Money and Obtain Financial Freedom

Author: Dante
Filed under: Budgeting, Wealth Investing
Date: Jan 14,2008

I was very fortunate to always get what I wanted when I was growing up. All I had to do was say I wanted something and sure enough I would get it. That made me into an impulsive buyer when I became an adult. I never looked for sales and therefore money just trickled out of my savings account.

I am not going to talk about looking for coupons or impulsive buying. When you work so hard to save money into a savings account you want to keep it there.

Save Money and Keep your Saved Dollars

Create a personal budget - very important first step. The best way to save money is to trim what doesn’t need to be spent.
- Depending on your income and expenses you will know a reasonable number to set aside solely for savings. Declaring a realistic figure like $25-$50 per week or maybe even bi-weekly.The point is something is always better then nothing so don’t get discouraged if it seems like a small amount.
The 3 Bank Account Difference - the 3 accounts all serve a distinctive purpose.
- Spending Account - this account can be a checking or savings account. This account will receive paychecks and will take the role of dealing with daily expenses. This one is okay to have an ATM card in order to withdraw money for day to day activities.
- Rainy-day/Emergency Fund Account - this will be your emergency blanket. This will cover any unforeseen emergencies. Job loss, car repairs, household repairs, house tax increases and so on.This account should have no ATM card and should be emergency use only.
- Savings Account - this account also should not have and ATM card and you will not transfer out money from this account for day to day purposes or things like groceries and so on.I use currently use Paypal’s money market account for this and I also use Sharebuilder money market account.
Fill up Emergency Funds Account - this account should be filled up before the savings account.As a rule of thumb try to save enough to cover all of your expenses for at least the next 6 months or do like me and save enough for 10 months
Save Money Now - when you have a nice emergency fund setup and ready only then would you start saving.Try to set an automatic transfer that occurs every two weeks or every month. Automatic transfers makes sure that you do it and you never have to worry about remembering.I picked up this from David Bach and his Automatic Millionaire book.