Rainy day funds: I'm going to open a new bank acct for each type

[JEDI]

all my $ is either in my bank acct or brokrage acct.

it pains me everytime i write a big check for either car or house expense. (new engine, new roof, property taxes, etc)

to lessen this pain, i'm going to open separate accts. one for car. two for house (fix stuff and property taxes). one for 6 months emergency savings for essential items (morgage, food).

so far that's 4 accts.

since i have SOOOO many banks near me, plus internet banks, i can open a new acct each time i need to save for a major expense.

this way, i have purposely saved for it instead of a general fund. when a write a check, i expect the acct to go down to $0, or as close as possible to the minimum the bank requires. rinse, repeat.

and i believe my direct deposit from my company can be split at least 10 ways (10% each) if not near infinite since it's all automated.

1) What do you think?

2) if you save for specific expense, how do you do it?

 

[Cuda1447]

All of mine go to the same bank account, Im just weird like that.

 

[potato28]

I'd have just one account, and I actually only have 1 account for all the emergency stuff.

 

[RossMAN]

Sounds like a huge hassle and pain in the ass.

Save up 6-12 months salary in ONE account and setup automatic transfer to an ING Direct account.

 

[Capt Caveman]

Whatever floats your boat, too much hassle and work to me. Plus, when you add it all up, it's still the same.

 

[Boztech]

Both ING and Emigrant Direct allow you to create "sub accounts" from your online savings account. This is how I silo my saving into "Emergency Fund", "Freedom Account", and "House Down Payment"

 

[Brainonska511]

Personally, I'd rather just leave it in in 1 account just so it's easier to track. If (since I'm only a 2nd year in college) I had a rainy day fund, it would either be a minimum amount in a high-interest savings account which I would also use to store money that will be paying bills or throw the money into some kind of Vanguard fund.

 

[Marinski]

2 accounts is all you need for liquid assets.

 

[Fritzo]

Seems dumb...why not just make one account? You'll be borrowing from the other accounts when one gets empty anyway.

 

[Boztech]

Originally posted by: Brainonska511
Personally, I'd rather just leave it in in 1 account just so it's easier to track. If (since I'm only a 2nd year in college) I had a rainy day fund, it would either be a minimum amount in a high-interest savings account which I would also use to store money that will be paying bills or throw the money into some kind of Vanguard fund.

You don't want your emergency fund money anywhere that might incur a penalty to use it.

Mutual funds should really only be used for investments (5+ years).

Emergency funds are best kept in online savings or better yet, Money Market accounts with check writing privileges (higher minimums).

 

[Brainonska511]

Originally posted by: Boztech

Originally posted by: Brainonska511
Personally, I'd rather just leave it in in 1 account just so it's easier to track. If (since I'm only a 2nd year in college) I had a rainy day fund, it would either be a minimum amount in a high-interest savings account which I would also use to store money that will be paying bills or throw the money into some kind of Vanguard fund.

You don't want your emergency fund money anywhere that might incur a penalty to use it.

Mutual funds should really only be used for investments (5+ years).

Emergency funds are best kept in online savings or better yet, Money Market accounts with check writing privileges (higher minimums).

That's what I meant when I said vanguard fund - there are just so many different options, between money markets and stock funds, that I just lump it into one category.

 

[JEDI]

Originally posted by: Boztech
Both ING and Emigrant Direct allow you to create "sub accounts" from your online savings account. This is how I silo my saving into "Emergency Fund", "Freedom Account", and "House Down Payment"

please elaborate.

do you have diff acct #'s for each fund? or when u write a check, just specify the subacct to take $ from?

 

[sciencewhiz]

I have 6 different accounts like that at ING Direct. No minimums, so I can start each account low, but a nice interest rate.

You can set up automatic savings plans at ING, so you don't have to mess with direct deposit each time.

I pay for the expenses on my credit card, and then transfer the money from ING to my checking account before the credit card bill is due.

 

[Skeeedunt]

Sounds completely insane to me. I just have a savings account with a spreadsheet to keep track of how much is "allocated" to different things.

 

[Kadarin]

I just use a checking account for normal bills and expenses, and a savings account for longer-term liquid assets.

 

[BarneyFife]

I don't see the point. At the end of the day no matter what fund you remove money from, its YOUR fund.

 

[JEDI]

Originally posted by: BarneyFife
I don't see the point. At the end of the day no matter what fund you remove money from, its YOUR fund.

but having diff funds for each big ticket item prepares you for them.


with 1 big savings acct, i think wow.. i got a nice stash. sure i know in the back of my mind that i need to pay $1k in car insuramce, $3k in property taxes, "sometime" down the road the roof needs to be replaced, etc.

but its still sticker shock when i write those 4 figure checks.

so by separating those accts, it's like out of sight out of mind. if i dont see it, i wont miss it. and since i'll probably look at my main acct ALOT more often then the other accts, i wont miss the $ in the other accts.

some people do great w/just 1 acct.

this thread is for people who open diff accts for each major bill/rainy day fund.

for those people, what's your method?

 

[MmmSkyscraper]

You know you have to spend the money on certain things so who cares? Just use one account and stop complicating things needlessly.

 

[sjwaste]

Mine all go to Fidelity, where I have a checking acct and a brokerage acct (with a high yield core MMA for liquid funds). When I get my paycheck dd'ed every month, I transfer a large chunk of it to the brokerage acct. That's my savings. Whenever that grows to a certain level, I put the excess into whatever mutual funds I'm holding -- that's long term money. So I sort of end up with checking, short term emergency, and long term funds by way of two accounts and the way the money is held.

The advantage (at least for me) is that the checking/debit account will overdraft from the core MMA if necessary, so if I really do have an emergency, I always have access to my checking and emergency funds in one swipe of the credit card or the same personal checkbook. This also means I can overspend frivolously and charge against my savings, but that's another issue

 

[Apathetic]

I only have two accounts: a checking account for normal bills and a seperate savings account for emergencies (lost my job, etc). Every couple months I put an extra couple hundred or so into the emergency account.

If I get a tax refund, I always take half of it and either put it into the emergency fund or make an extra large payment against my mortgage.

That works well enough for me.

Dave

 

[maddogchen]

i would only open an account to get their $50 or $100 signup bonuses

 

[HannibalX]

I have 2 accounts - checking and savings.

All the details are kept track of in your LEDGER. Your LEDGER is governed by your BUDGET. In your BUDGET you can specify how much money is available for the house, the car, the vacation, etc. Your LEDGER tracks all incoming and outgoing transactions and reports the information to your BUDGET.

Go to your local CC and take a course on book keeping, since your mom and pop never taught you how to manage your $$$.

**BOOK KEEPING AND ACCOUNTING ARE NOT THE SAME THING, ALTHOUGH PLENTY OF BOOK KEEPERS WILL TELL YOU THEY ARE ACCOUNTANTS!

/rant off.

 

[dmcowen674]

Originally posted by: JEDI
all my $ is either in my bank acct or brokrage acct.

it pains me everytime i write a big check for either car or house expense. (new engine, new roof, property taxes, etc)

to lessen this pain, i'm going to open separate accts. one for car. two for house (fix stuff and property taxes). one for 6 months emergency savings for essential items (morgage, food).

so far that's 4 accts.

since i have SOOOO many banks near me, plus internet banks, i can open a new acct each time i need to save for a major expense.

this way, i have purposely saved for it instead of a general fund. when a write a check, i expect the acct to go down to $0, or as close as possible to the minimum the bank requires. rinse, repeat.

and i believe my direct deposit from my company can be split at least 10 ways (10% each) if not near infinite since it's all automated.

1) What do you think?

2) if you save for specific expense, how do you do it?

Topic Title: Rainy day funds: I'm going to open a new bank acct for each type
Topic Summary: ie: One for car problems, one for house problems, one for 6months of expenses, etc

Be prepared for the banks to steal your money.

 

[AgaBoogaBoo]

Ok, so let's say you want to set aside $500 for 6 different funds.

Account 1
2
3
4
5
6

They all have $500 in them. Now, instead of that, put it into one, but manage it on paper as 6 virtual accounts with just 1 "physical" account. Do your numbers like that if you want, the end result should be just the same.

 

[manlymatt83]

Originally posted by: JEDI
all my $ is either in my bank acct or brokrage acct.

it pains me everytime i write a big check for either car or house expense. (new engine, new roof, property taxes, etc)

to lessen this pain, i'm going to open separate accts. one for car. two for house (fix stuff and property taxes). one for 6 months emergency savings for essential items (morgage, food).

so far that's 4 accts.

since i have SOOOO many banks near me, plus internet banks, i can open a new acct each time i need to save for a major expense.

this way, i have purposely saved for it instead of a general fund. when a write a check, i expect the acct to go down to $0, or as close as possible to the minimum the bank requires. rinse, repeat.

and i believe my direct deposit from my company can be split at least 10 ways (10% each) if not near infinite since it's all automated.

1) What do you think?

2) if you save for specific expense, how do you do it?

Do this through ING Direct. Opening another savings account takes 3 seconds online, and at one point I Had 30 for the fun of it