What is a freedom account?

Avatar for sohappilyme
iVillage Member
Registered: 03-26-2003
What is a freedom account?
4
Wed, 01-05-2005 - 11:37am

I keep seeing it on the board and I've never heard of it!

Sarah
iVillage Member
Registered: 03-28-2003
Wed, 01-05-2005 - 12:01pm

Freedom accounts come from Mary Hunt's book Debt Proof Living and they are wonderful. They are savings accounts. I have 12 freedom accounts: emergency, gifts, clothes, auto ins, auto maintenance and registration, property taxes and homeowners insurance, medical/dental/vision, house repairs, vacation, DH's hobbies, vehicle replacement, and furniture. These help me plan ahead for big expenses and avoid blowing my budget.

Julie

Avatar for sohappilyme
iVillage Member
Registered: 03-26-2003
Wed, 01-05-2005 - 2:08pm

Wow!

Sarah
iVillage Member
Registered: 03-28-2003
Wed, 01-05-2005 - 2:36pm

Yes, there are 12 actual accounts. I use ING Direct. This is an online bank that is great. They pay good interest (2.35% right now), they don't charge service fees, it is linked to my checking account and I can do online transfers.

I like the separate accounts because it helps me stay on budget. If my clothes account has $50.00 dollars I don't spend $100.00. I deposit monthly payments for auto insurance and pay for the renewal every six months. By keeping separate accounts I have named every dollar. I don't look at a total of $3000 and think goody let's go to Hawaii. Well, I might think it but I don't do it because I have to pay taxes, insurance, Christmas, etc.

Hope this helps.

Julie

Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Wed, 01-05-2005 - 6:15pm

You don't have to have separate accounts for a freedom account. According to Mary Hunt, she advises to open a checking account (not linked to atm/debit card). In a 3 ring binder you take a sheet of paper. On top write the account name (for example: Auto insurance) Then you write 5 columns titled: Date, Decription, In, Out, Balance. According to bank, you have one account. However, you have created sub-accounts.

I hope this is clear.

MYM