Great! I’ve been fighting the old washing machine for almost two years. It seemed to have a mind of its own. First it refused to do certain washing cycles, then it wouldn’t start unless I would slam its door to shut it, and finally it decided it wasn’t going to spin anymore. Okay, that’s it. Time for a new one.
I had the advantage of knowing beforehand that the time drew near to buy a new washing machine. So I’ve started to put some money aside as quickly as I could. Most of the time, though, purchases of household appliances tend to happen when we least expect them, don’t they? Then we will need to have quick access to savings which we can spend on these kind of things. In How To Manage Paying the Bills (Part Two) I mentioned that I will do a separate post on saving money each month. So here we go!
Saving, For What?
Set money aside to maintain, repair, and replace cars and household appliances; and, not to forget, clothing and footwear. It’s so tempting to buy these things on credit as need arises. However, you can save your family a lot of money, by not having to pay the horrendous interest for a loan. You will not only end up saving ahead for things to buy but also saving the money you would have spent on the fees for the credit. That’s extra money you will have to put toward the price of an applicance or car or whatever.
If you don’t have health insurance that will pay most of the cost, you will want to save up for medical issues. That includes regular doctor visits, money spent on medication but also visits to the ER or hospital stays. And don’t just think human. If you own a horse, a dog, a cat or any other pet, it’s smart to put aside extra money for them as well.
Last but not least think to save up for fun things like books, movies, music lessons, daytrips, vacations, sport events and more.
Saving Each Month, How Much?
In your budget book, “open” a separate account for each kind. One could be called “Car”, another “Household”, another “Clothing & Shoes” and so on. Of course you can transfer the money to your savings account in one go, however, it’s best to keep track of how much you have saved up in each account.
At first, it doesn’t matter how much you will save each month. The main thing is to be consistent, getting into the habit of saving up money. Eventually you will get a good feeling on how much you should be putting toward each account. Your goal is to have enough money aside so that if there is an emergency coming up you will not have the extra burden on your shoulder that you might have to go into (deep) debt.
Think Twice Before You Buy
Even if you do have a large amount of money set aside resist the temptation to buy spontaneously. Your savings will vanish faster than you can imagine. Think about the investments you make. Sleep on them, then decide.