How do you save money??
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How do you save money??
| Mon, 12-13-2004 - 3:12pm |
Since we are going to be taking in about $500 month more than we were before, we are thinking about how we should set money aside for savings. In the past, I have contributed a certain amount to my company match stock purchase program, but I sold it and have decided i don't want to do that anymore. We have some major expenses lurking over us the next couple of months (cost of replacing carpet at old residence, also a possible trip to Florida in March because the whole family from three states are going, some we haven't seen in years, so it is the most efficient way to be able to see everyone) So there has to be a short term savings and a long term savings, I guess. My husband can do a money market with no fees since he works for a bank. Also we can start putting money into his company 401k, which has a really good match. Problem is, we don't want the money tied up too much, because we really have a unique set of circumstances which make it impossible to project what we are going to need expense-wise over the next two years (DD'S state funded therapy runs out Feb 2006). We can also just use all of the extra towards our debts, but this is usually what gets us into trouble because something big always comes up when we have no savings. Just looking for ideas. thanks, heather

I would set up a few different savings accounts, or one account and track what you are saving for. You can have one account for travel expenses, and set a limit, say $1,000. Save $50 per month and once you hit $1,000 (or whatever you think you need for 1 trip) you stop contributing to that account, if you deplete the account, then you start contributing to it again until it hits it's target limit. Then have an account for emergencies, save $100 per month until you get to $1,500 (or whatever amount). Have a savings account for household maintenance. Set a target for your child's therapy and save an amount per month that will get you to the goal by January 2006.
It's also good to be investing some of your savings. So if you save for the things you know you'll be spending in the short term, carpet/travel, and you save for some medium/long term needs, such as child's therapy, then put the extra into an investment. Adjust the amount when you use savings so you build the savings back up again, and when the savings is what you need, increase the contribution to the investment account.