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17 savings accounts...and why I need them all
Close up Pink Piggy Bank and White Computer Keyboard on Top of White Blank Table. EmphasizingHow one family went from virtually no savings to amassing thousands of dollars...using direct deposit to account categories for discipline and peace of mind. - photo by Jana Parkin
The dreaded bank statement: were we overdrawn? How much did the bank charge us to cover the shortage? Or did we make it to the end of the month with a few dollars still residing in our account?

Seven years ago we had virtually no savings and no idea where our money was going every month. HeyIm an artist and my husbands a film professor. There are no accounting genes in either of our DNA!

I overheard some good friends talking about a financial advisor, Adam Hoover, and how hed turned their finances around. I decided to give it a shot.

Heres how it worked: we gave Adam and his team every piece of financial data we knewand even some we didnt knowincluding bank accounts, credit cards, retirement accountseverything.

Our savings account was at zero. In fact, it had been at zero for so long the bank eventually just closed it. We had $145 dollars in an online savings account set up years earlier. And a few thousand dollars tucked away in random retirement accounts.

Adam went back and crunched some numbers for us and recommended not only tracking our expenses, but creating some kind of automatic savings plan as well. I was dubiouswe were living pretty much hand-to-mouth and didnt think we had enough extra to consistently devote to savingsbut we decided to try it anyway.

We started small$50 here, $100 there. I just put the savings on autopilot and watched it grow. Okay, Ill be honest, I didnt really watch it, because numbers arent that interesting to me. I simply left it alone and hoped it would multiply.

We started out saving for just a few major expenses and potential emergencies, including: auto expenses, property taxes, and a rainy day fund. Then we thought it would be helpful to set aside some money for birthdays and holidays so Christmas didnt break us. The financial planner also noticed my part-time teaching income came in four-month waves, with nothing coming in during the summer months. He recommended half of my income be set aside in a summer savings account to float us through those leaner months. I agreed.

Before we knew it, we had accumulated thousands of dollars in savings. Suddenly I was hooked! We set up an education fundboth for short-term needs and college tuition. Then we added savings accounts for the kids, so that we could fund with their allowance money.

What about a mortgage savings account? In case of an emergency or job loss we wouldnt miss a payment. We added a service fund, for charitable work. An art savings account, to stash money I make from painting sales and workshops and tuck it away for big-ticket expenses, like materials and travel. Then, we saved $25 a week for a future family vacation.

We also decided to set up an income tax fund, after wed had to pay extra at tax time. So, now 25% of our freelance income goes straight into the tax fund; the money is there if we need it. And if we have a lucky break and are getting a refund, we drop the tax savings money into a retirement account instead.

What I noticed was amazing: because our savings was apportioned out and labeled for specific future needs (and a few wants), I was far less likely to spend it. If you look at an account and say, Wow! We have $20,000! its tempting to think you can splurge. But if you look at 15 individual accounts and realize, we only have $600 set aside for auto expenses, $1100 for education, and a couple thousand dollars saved for a wedding, you are far more likely to leave it alone, and not spend it.

What this gives me, that is worth more than the money itself, is a sense of security. When the car broke down and our daughter called, panicked because the estimate was $600, I just calmly said, No problem, I can transfer the money from our auto account. When our sons scholarship didnt cover all of his tuition, the education fund made up the difference. And when the big credit card bill arrived after Christmas, I just transferred the money from our holidays account and didnt give it another thought.

Our savings accounts are set up through Capital One 360 (a very user-friendly online banking system that keeps all the accounts in one place for easy reference). Money can be transferred instantly between accounts, and transferred within a couple of business days to my regular checking account.

Funds are transferred automatically from our regular banks checking account in the amount we specify, on the date we specify. Im sure there are many banks that offer similar convenience and ease. Check with your financial institution and see whats available. Youll feel like a money pro in no time!

You may not need 17 savings accounts, but any number that works for you is a step in the right direction and a priceless gift to your peace of mind.

Heres our current list (retirement not included here) of savings accounts:

Summer Savings

Childrens Savings accounts

Rainy Day slush fund

Health Savings

Home Repair Savings

Education Savings

Auto Savings

Service/Travel Savings

Tax Savings

Art Savings

Mortgage savings

Property Tax and Insurance Savings

Pet Savings

Mission Savings

Wedding Savings

Birthday and Holidays

Million Dollar Idea Fund
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