Okay, you didn’t actually offer, but y’all did weigh in on yesterday’s money discussion, so I couldn’t help but wonder (name the reference): how do you handle savings?
I don’t come from a Savings Family so I can’t really do the whole Saving Thing the way my family did. Like a good portion of the American public, they paid their bills and took out loans and mostly lived paycheck-to-paycheck.
Like a good portion of American kids, I want to do things a little better than my parents did, and so I want to save. With a plan. And less stress. Because right now I’m saving but with a whole lot of stress.
To-date, I’ve either not saved (bad Marisa) or saved big lump sums into one single account. One single account is fine when you have one single-minded goal (“pay off debt!”), but a little confusing when you have many goals.
Take our situation as a good example. Once we pay off Joey’s car, things will change. He’ll be going back to school, we’ll have no debt except the house and my truck, and we’ll be less into PAY EVERYTHING OFF and more into MANAGE EFFECTIVELY FOR A WHILE. A long while. Multiple years, years that will likely bring us lots of changes like children and, well, children. {Could there be any bigger changes? Unlikely. Okay, maybe, but let’s not think about that for now.} We’ll be a one-income family for the most part, and thank gawd my salary has increased so that it’s just about the same as our joint income. With one less house (pleasegodpleasegodpleasegod) we should be fine but we’ll have a bunch of different goals: upgrade the kitchen, prepare for a baby, go on vacation, buy guns (kidding, though my husband would be thrilled).
So back to the savings: do you save into multiple targeted savings accounts, and if so, how do you decide how much to put into each one? I get the concept but am struggling with the mechanics. And hey, while you’re at it, any suggestions on how to be happy and united while one spouse is a full-time student and the other isn’t would be fabulous!
We are in debt payoff mode right now, but we still put a little bit away every month just so that our savings is growing (even if it's just a little). The easiest thing for us was to open an ING savings account. The ING savings is like a green file folder for savings, in to which you can put different tabbed folders – we currently have just two, one labeled HOUSE and one labeled BABY. I know a lot of people that have 5 or 6 different files in their ING account, though, and I believe you can have as many as you want. Right now a baby and a home are our top priorities for savings, so that's what we're focused on. As for how much to actually put in? I made a budget and figured out what we needed after our bills were paid. Those "after bills" categories were Food, Gas, Fun, Gifts. Then I figured out how much we actually needed for food and gas, how much we reasonabilty wanted to spend each month on Fun Stuff (going out to eat, baseball games, movies, etc) and how much we'd need over the course of the year for gifts (we have 2 weddings, Christmas, and of course birthdays). Once I figured that out, I had some money left over. That goes directly to savings – if it didn't, it would get spent on crap every single month. It's only a couple hundred right now every month going in (because we're trying to pay off our debt) but it still adds up quite nicely and when we're done paying off our debt, we won't be starting from square one.
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I pretty much echo exactly what Kate said. I use ING for our savings accounts because of the ease of creating multiple accounts and the ease of moving money around.For each item (currently: VACATION, EMERGENCY FUND, CHARITABLE GIVING), I set some sort of goal for what I want to save. Then, I figured out how long I wanted to alot myself to save that. Simple math to determine the automatic deposit to each account.I found that I didn't have a $ goal and a time goal, then I began rationalizing either taking money out of savings for something stupid or not contributing, at all.
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We are saving for a downpayment. I get quarterly bonuses, so those are 100% put into that account, and we live off only our weekly paychecks. Otherwise we take every available penny into paying off debt so we can easily get by once we have two mortgages (can't sell current house will have to rent out, stinks). I am not good at saving out of every paycheck, so if we weren't in this situation of having a significant amount coming in every couple of months I don't know what we would do. I think having a goal in mind (safety net, kid, kitchen) helps so you know you are working towards something and not just watching a number grow with no goal.
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This is long. heh. We have two savings accounts. (3 actually, but hubby doesn't use his personal one.) So our money accounts look like this.Him:CheckingSavings (not used, came free with checking I think)Me: Checking SavingsUs: Separate, higher APR Savings (INGdirect)What we do is this. He and I both make lump automatic deposits from our paychecks on a monthly basis, into the shared savings account. Until I paid off my car, I was contributing 18% of my monthly earnings. After paying off the car, I diverted the car payment money into the same savings account. So, I'm now putting about 35% of my monthly earnings directly into savings. He contributes about 12% of his monthly earnings; but he also pays more of our bills from his account than I do, so it all works out fairly for us. That account, which obviously takes on the bulk of our savings, is for longer term stuff. It's an emergency fund and savings for the future all rolled in to one. Sometimes we'll earmark some of it to pay for something big we've both been wanting (or to pay off a loan, when its balance gets high enough) — we don't really have any rules about how it may or may not be used. But the point is, it's separate from our 'normal' accounts. And we never run it dry either. My personal savings account is my 'whoops' account. As in 'whoops, my car needs new tires' or 'whoops, this bridesmaid dress doesn't fit at all and I need have it seriously altered'. I automatically deposit 1% of my monthly income into the 'whoops' account. Hubby knows I have it too, and can of course use it if he needs extra (but he usually doesn't because unlike me, he keeps cushion money in his checking account). I use this checking account so that I/we can take care of any little emergencies that arise without dipping into the major savings account. I also use it to save up to buy Pink Hubby nice things, sometimes. It generally has $1000 or less in it because I either spend the money, or move some of it into the other savings account when I think I've got enough to do so. I hope that was a halfway understandable explanation!
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I'm honestly a recreational saver– grew up in a big saving household– so I'm fascinated by how specific people's saving's goals are. Mostly I save to ensure that a bad situation– car break down, losing job, illness, etc. etc. etc. is not made worse by money woes. Aside from an emergency fund that we purposefully established and put in a separate account, and paying down the principle on student loans, we don't have explicit goals for our savings. I'm not sure if this totally unwise. It definitely seems to be the minority position. The reason for this may be that we're not really seriously considering children or buying a home right now. flexibility is our number one goal. thanks for getting me thinking about it.
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Per my financial analyst husband, you should max out your 401k every year and contribute the max to your IRA. (This may be a different kind of savings than you're talking about but planning for retirement now definitely will benefit you in the long run.) So I've been doing that now that my paycheck has increased enough to be able to live without that money. Before, I'd just increase my lowly contribution amount every time I got a raise. That way I didn't miss it.As for *savings* savings, I have 2 accounts. One is through ING like the other ladies said. They usually have the best interest rates. I also have one (much smaller) through my credit union just so I can keep an account there (they have better deals on auto loans so it's worth it to stay affiliated). How much to contribute? The most that you can. Vague I know.And I also have some money in the stock market now (but only because of my husband). We invested when the market was super low and it has paid off nicely. If only I had put in more! Good luck! I think you're heading in the right direction.
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We are on a savings mission as we are planning to upgrade from a condo to a house; have a baby or two; go on a big trip before baby arrives; and me transition to a SAHM (big changes!). It will be a major change losing my salary (50% of our income), but being a SAHM for a few years is something I really want and that my husband supports even though it means we will have a smaller house and not get to splurge on much of anything.Right now we are on a budget and track EVERY receipt (even if it's a post it note that we spent $20 on girl scout cookies). What we did was track our spending from the year before, examined what was really frivolous, looked at our savings goals (how much we need for downpayment, emergency fund, vacation, baby, new house furnishings, savings, etc) and made a budget that we strive to meet each month. We did put in money for fun things like hobbies, dining out, entertainment, gifts, charity, but we are more conscious of how much we spend b/c we know the more we spend on something that is a "luxury" it means we will have less to go towards our savings. Right now we save all of my income and about a quarter of my husband's income. It's hard, but I get excited at the end of the month when we check our budget and get to deposit a lump sum into our high interest savings account. Having these shared goals really makes it easier for me to save…before I met my husband I would basically spend, spend, spend and had barely any savings.I'm not sure what your specific concern is about the situation with one working spouse and one student spouse, but my general advice would be to stay focused on your shared goals and think of his education as your joint investment. There was a time where I made a lot more than my husband. This didn't bother me because I knew he was on his way up to bigger and better things…and now he outearns me and this will continue. I've said way too much! Thanks for posting this…it's really helpful to read what others are doing as their savings plan/strategy
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We have 4 savings accounts. One is for a house/emergency fund at a high interest credit union. The other 3 are at Chase and were supposed to be for specific things, but I got all kinds of confused and now those accounts have money being auto-transfered in to save for yearly and holiday expenses together, rather than for each specific expense we picked. Does that make any sense? If it doesn't, that's because I've confused even myself!
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I would appreciate any advice you get about having one spouse go back to school… We've finally reached a good balance with our two-earner semi-shared financial situation, but once I go back to school I'm afraid we'll have to fight it out all over again. When I went to grad school the first time around I was on my own and got by comfortably on next to nothing, but we're older and more comfortable and spoiled now.
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We keep it pretty simple. We have one joint checking and one joint savings account. I have been a full time student since August 2009. Prior to that time, I kept my own checking, we had shared savings, and I paid my own bills. We opened the joint savings when we got married last February. As far as savings go, I am generally as saver and he's a bit more spendy. However, for pretty much the entire time we've known each other, we've been saving for one large purchase or another (wedding, moving expenses, house, home renovations), so we've both become save-a-lot-then-spend-a-large-sum people. This works for us because we both have professions that allow us to pick up additional work when we require additional income. We will both also have significantly increased income within a known time frame. At that time, saving for retirement will be a lot easier for us.As for my transition to full time student, it wasn't easy, but it wasn't too awful either. I was planning to further my education before we met, knew that it would allow me to work little, if at all, and planned to take out student loans to cover my expenses. I remind myself of these facts so that I don't feel as though I'm living off my husband (not that there's anything wrong with that, I'm just used to taking care of myself). I use loans to cover my tuition and he covers all of our living expenses. Sometimes I feel guilty, but I shouldn't. When I finish school, I will have increased my earning potential 4 fold, so it's a worthy investment. When we first made the transition, I felt weird about spending any money at all on myself knowing that I had no personal income. I felt as though I had to justify every little expense, which was all in my head and was none of his doing. After a short time, I thought it might be good for me to have my own account with a personal spending budget just so I would feel more in control and independent in my spending habits. He said "of course, whatever you think you need", I didn't make it happen, and I eventually got over it, but I still think it's a good idea for anyone in my situation. As it stands, I don't spend all that much anyway, and I'm too busy with school to worry overmuch about finance details.I think it's very important that the partner with the income doesn't create a power issue where there doesn't need to be. Remember that you are a team. In many ways, I weigh in on financial decisions but ultimately defer to my husband by choice. He asks for and respects my input. If something is really important to me, I take a stand. If he were to try to hold it over my head and take control, I would go crazy. I would advise strongly against that. Do your very best to let go of thinking that s/he who makes more has more control. I think combining your finances will facilitate that. I think it's also important that both partners feel the other is working just as hard, even if the incomes are very different. School takes up far more of my time that full time-plus working ever did. It is harder than undergrad when I had 18 hours and 3 jobs. BUT I still find time and ways to take care of him and our home. I think that means a lot. I'm working very hard, and this is not a fun or indulgent activity. This is not a situation where I have an excess of leisure time and he works his fingers to the bone. When we feel like we're both working really hard for common goals, we feel united. I also remind myself that I am blessed to have options and opportunities to further my career. Sorry this is so long, but you asked and I can answer from the trenches ;o) I've got to go hit the books!
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we are still transitioning into having savings goals, as we graduated from college a year ago and are attempting to find jobs in our career field… heh. that's been fun. so for now, we save anything extra. we have a budget and stick to it pretty closely, and it includes saving a few hundred a month. for now, the savings account pays for emergencies and vacations, and in case one of us loses our jobs, which he did a year ago, and i will be next month (my temp contract is ending). we have one savings account, linked to our checking account, and after the bills are paid every month the extra is transferred to the savings acct.as far as the transition to back to school… good luck. for us, at least, it was difficult, and we usually agree about money otherwise. he did a full load our senior year, whereas i had worked ahead enough that i went part time and worked full time and we still could graduate together/on time.he did. not. like. that i was earning the majority of the money. that took some getting used to. i didn't like that we were relying on my income, and i felt guilty/very stressed if i worked a few less hours one week in order to write a paper or study. even now, as he's been laid off last month (again) and i am in grad school full time/working full time, i'm feeling the enormous stress of it all. so i guess my advice would be to be prepared for tough, be grateful if it's easy, plan ahead, and talk, talk, talk.
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