Wednesday, February 20, 2013

Sitting Money

As a side note to nothing that will follow in this post...G-man just left for work.  Thank goodness, as he was a crabby patty this morning and he needed to GO.

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So I am going to revisit a topic that I haven't talked about in awhile:  Savings accounts.

We have 3 categories of savings accounts:

1) EF fund.  This is at the credit union.  We have our car loan there as well, and we have money direct deposited from G-man's main paycheck.  The amount covers the car loan, and an EF contribution.  We rarely withdraw money from this account, as I am not really sure WHAT an emergency would constitute.  Yes, the washing machine last year was an emergency, but in the ideal world I would have a separate account to cover those types of things.

2)  CapitalOne360.  Formerly ING Direct.  We have about 10 accounts there that are "sinking funds" accounts.  We have money for car repairs, the cats, Christmas, camp.  I know some people will say we could have just 1 account, but in my world, I need to see the visual breakout.  Hey, it works for us.

3)  The savings account linked to our checking account.  When we opened our checking account 13 years ago, we opened a savings account.  We do add a little to it each payday, but mostly it is used for "overage" or float money.  In years past, I would pull money from there, and maybe it made it back...maybe not.  In the past 2 years, I can honestly say that 90% of the money we have pulled from there was put back in less than a week (usually it was a float just until payday).

I keep thinking about savings account #3.  It has about $1,300 in there.  And most of the time, if I do pull money, it is $200-ish, and then transfer it back on payday.  So on any given day, there is typically at least $1,000 in there.  Remember, this is in ADDITION to the EF fund.

I keep wanting to take it down to $500, and put that extra money elsewhere.  Probably part of it would plump up the car account, as it seems that is the one area of our lives that seems to cause the biggest problem.  Maybe I would put $250 in there.  If I didn't plump up the car account, that would leave $800...

$800

That would be 3.5 extra car or student loan payments.  It would be about 70% of either the dentist bill or Bossy's supplies.  It would be about 1 month extra payment back to the retirement loan.

Even if we put the $250 in the car account, that would still be $550, which still would bring things down, although the WOW factor isn't as high.

So what is holding me back?  The security of knowing it is THERE.

Even though logically I know we still have money we can pull from other places, knowing it is in that account just makes me feel better, even though it could actively be doing more.  I know I would still have $500 in the account to "float" and we have NEVER needed to float that much.

I used to say when the account hit $1,000, I would take out money.  Then I said when it hits $1200.....and now we are at $1,300.  I have no idea why I need this money sitting there....other than security, but security for what?  I have an EF.  If we absolutely needed to, we could drain money from the CapOne accounts.  So what am I doing here??  Maybe I should just pull $100....and ease my way into it.

What would you all do????  Leave it?  Use it for other purposes?  Take a vacation (trust me...this thought has crossed my mind.....but I couldn't do it)?


17 comments:

  1. I can't blame you, I keep $1,000 at all times on my bofa account, no matter what happens I never let that go down- for the same reason as you, security... but for what?! over the past 5 years since starting the blog it has never gone down under $1000.

    HS

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    1. Is that BOA acct your EF, a slush fund, other?

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    2. Emergency fund but I've never used it on a emergency... I like the security like you.

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  2. I have $1500 in a savings account and $1500 in a 12 month cd. This is my "lets me sleep at night" money. I have promised myself though that when I have the credit card down to $1500, I'm wiping out one of them to get rid of the card! At that point I should be able to replenish it quickly. Conventional wisdom would tell me to go ahead and take the money and zap the card.... but, I still need to sleep at night, so I don't do it yet.

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    1. I am trying to figure out where the line is that will let me sleep, but still be productive.

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  3. I'm with you on having to see money partitioned instead of making mental notes of a big pool of money. As far as how to keep your money... I always envisioned that my savings (in a perfect world) would build up slowly, and that any overage would be tallied at the end of X months and redistributed, including some for myself. For example, if you want the account at $500, but you ended up with $1300 at the end of X months, redistribute the remaining $800 and restart contributing extras to that account. It'd be like lump-sum payments every so often without even trying. And of course, get some for you as well, as these savings were not scheduled.

    Also, do you feel your EF is sufficient? Maybe wanting to keep more "just in case" money is trying to tell you something. I know my EF is nowhere near sufficient, so I'll hold onto money promised elsewhere for as long as I can.

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    1. The EF...I said $2000 would be good (for now....until we get more debt paid off). We are "technically" there...but there is another story to that...I don't count $500 that is actually in that account.

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  4. If it makes you feel better knowing you have that extra $1300 I say you keep it where it is. Piece of mind goes a long way. This post reminded me I really need to start saving especially now that I am a home owner again.

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    1. Homes suck money, don't they? We don't have nearly enough saved for all those home things. We tend to try and save what we need as we go. Would love a big home account!

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  5. Looking at your side numbers, could you start small and knock off the $148 Other medical bill....then see how you feel. If that feels good then you could use more of the money, if not then you would at least have one of your extra bills off of there.

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    Replies
    1. That is why I mentioned the $100....maybe just take a little just to see how it goes.

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  6. I'm with Rachel. I'd start small & clear out the lowest bill. That way, you can feel progress by actually marking something off, but it doesn't take too much out of your other account. Then reassess & look at your next bill.

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  7. I too have many savings accounts. I just need to keep money separate so I don't spend it. I would pay down a bill and know that it is gone.

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  8. I like the transition method. Take out the $250 and put it in the car account that way it's still lingering and it stresses you out anyways so that would leave you some $1150 in the savings. Then next month, take it down to $1000 by paying something with it-- maybe the loan that has the highest interest or the loan with the smallest balance. So in effect, you're doing the snowflake thing. And then the month after, bring it to $900. And then bring it to $800. And then bring it to $700. Even though the payments won't be superstar they'll help you and not be super stressful. And they'll help reduce interest at whatever loan you send them to which is always nice. If a month comes and you're ready to bring it down even more, do it!

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  9. Pay the dentist. It's psychological.

    Keep directing money there. So it grows and you can have the problem in a year.

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  10. I'd put it on a bill as well... that "other medical" bill is so small... why not just be done with it rather than having another bill that you owe on hanging over your head??

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  11. I sure miss the "orange" account :( I'm in mourning I think, as I've been with ING since the very beginning. I too have several accounts with them but I'm a little worried they might take that ability away. We had to call last week for some technical help and for the 1st time ever I was asked, "We see you have several accounts. Would you like to cancel any of them?" NO, I don't!

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