Just funded my freedom account!

iVillage Member
Registered: 03-27-2003
Just funded my freedom account!
Fri, 05-16-2003 - 11:51am
I read Mary Hunt's "Debt Proof Living" earlier this month, and with dh's 15th of the month paycheck, I funded our new freedom account. We signed up for ING, and instead of the paper logs Hunt suggests, I've just divided the savings into several separate accounts. We have an automobile account, a Christmas fund, a fund for our son's birthday, a miscellaneous fund, and a fund for gifts for others. Oh, and another fund for paying back a personal loan to my in-laws. We are only allotting $10 a month for that (it's an old loan, several years, and we've been remiss in paying it back, always thinking we'd do it "when things got better"). Anyway, it seems silly to send them a $10 check every month, so instead we're building the fund and then won't they be surprised when, 10 years after making the loan, they suddenly get a check in the mail for $2500! LOL Actually, I may send them their first check when the fund reaches $500, and it will grow faster once our cc bills are paid off.

I'm also planning to add an "electricity" fund. I averaged the cost of electricity over the year, and each month that it is below the average, I will contribute the difference to the fund, so the money will be there when the bills go up in the winter. Also, since I do some freelance work, there will be a "taxes" fund, in which I'll put 30% of every freelance check I get, and by that means will have the money ready to pay the taxes on it at the end of the year. And if my taxes are lower than that--woo-hoo. I'll snowflake the difference onto my credit cards.

I also put another $50 in my contingency fund, and will do that every month. I'm thinking of putting my contingency fund in a money market instead of a savings account. It's nearly as safe, and pays a better return. And since I shouldn't need my contingency fund for anything short of catastrophic disaster, it doesn't matter that I can only write four checks out of it per month and for a minimum of $250 each. It also won't matter that the funds aren't available for 30 days after deposit, because each deposit is only a small percentage of the available balance.

Anyway, just wanted to share my excitement over the new budgeting skills I'm learning. It is such a relief to know that when "unexpected" auto repair bills arrive, and at Christmas and birthdays, we'll have cash ready to fork over, no fuss. And we may not ever have to touch our contingency fund again! Woo-hoo!

Thanks for listening,


P.S. Other good news--it sounds like dh is going to be getting another big promotion and raise at work again. Somebody opened the floodgates for us! :)

P.P.S. I have a guess who opened the floodgates, and I believe truly it is because we loosened our grip on our money and committed to charity every month, starting with this latest paycheck, and refused to change our plans even when unexpected hitches showed up. If dh gets the raise we expect, I have already committed to up our charitable giving to the full 10% that Hunt (and the Bible, LOL) recommends. It's so fun writing out that check to a cause we believe in every month!

P.P.P.S. This post never ends! LOL Just wanted to add, that we are still more than a couple of tens of thousands of dollars in debt, and will be in debt for several more years, but it's good to be on the road out.

iVillage Member
Registered: 03-26-2003
Fri, 05-16-2003 - 1:50pm
That is so great! are all of those separate accounts at ING? I have often thought that doing it that way would be the best approach, but I thought it would be a hassle keeping track of all those accounts. But I guess if they are all at ING and direct deposited and you can keep track of them online, it wouldnt be so bad. I think that is the best plan!! congratulations on getting it started!!


iVillage Member
Registered: 05-08-2003
Fri, 05-16-2003 - 2:43pm
congrats Heather! Freedom funds are the absolute best thing ever! We have alot of them in place too, in a separate bank account which is divided up into 'savings goals' in Quicken, and it takes such a load off doesn't it! Paid $1400 in property taxes this year without batting an eye cuz it was all funded in the freedom fund.

doing a happy dance for you!


iVillage Member
Registered: 03-28-2003
Fri, 05-16-2003 - 2:48pm
This is a great post. I can tell how excited you are to have your plans in place. Saving can be as exciting as spending when you know you have a goal and the plans to reach your goal. I'm glad to see you're saving along with debt reduction. Having savings and not charging is the best plan for debt reduction.

I have 12 funds at ING all under the same account. My savings goal now is to build up the emergency fund that everyone recommends (6 - 12 months bills and living expenses). My savings funds match my budget items and I'm saving 1/12th of the total of our monthly bills and expenses to these funds. Starting with 1/12th is not going to build up very fast but it's a start.


Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Fri, 05-16-2003 - 4:18pm
That's great Heather!!!

And you know what - I'm right there with you for the giving. Believe it or not, with all we have gone through we have been able to continue giving...now I *did* have to adjust WAY down what I could give considering our expenses are more than our income but still every time we got our unemployment check, I take a small part of it and give.

I really like the Freedom Fund concept.


iVillage Member
Registered: 03-27-2003
Fri, 05-16-2003 - 7:15pm
Yeah, they're all separate accounts. I think it's a matter of whether you prefer to keep track of them on paper or on a computer--it could be done either way. I like having them literally separated out. For one thing, it reduces the temptation to "borrow" out of one fund for something that should be covered by another (like borrowing out of Christmas for a birthday).

I'm also keeping separate track of each one in Money, as I don't trust anyone else to keep accurate count of my money all the time. So that is an added hassle, but it is mostly automatic, so it shouldn't be a big deal.

Thanks for the encouragement!


iVillage Member
Registered: 03-27-2003
Fri, 05-16-2003 - 7:18pm
That's awesome that you continued to give despite everything! I admire you for that. We were giving up until a few months after dh lost his job a year and a half ago, and then we stopped giving when we couldn't even pay our bills any more, but we probably should have kept at it. The worst part is, even after dh got a job and I got a part-time job and we were making more than enough, we didn't go back to giving, because we were so tied up in getting our debt paid off. I feel so much better having let go a little bit and re-committed to giving.

Good for you for keeping it up all along!!