Life is full of insane paradoxes, right? Catch-22s, things that don’t make sense, and opposite reactions than you were expecting.
Apparently the same holds true for finances!
The basics of personal finance always seem to start with save, save, save. Even if you”re only saving a $1K safety net, it’s still the first step in Dave Ramsey’s Financial Peace program, and almost all of Suze Orman’s advice.
Which is why when I consciously started saving less and ended up with more money things got really weird.
What I’ve Always Done With Savings
I am one of those repeat offenders who can save $1K a hundred times…. and always seem to not have it in the bank anyway.
There’s always some pressing reason that we need to transfer that money out of savings. Maybe it’s an important car repair, or we need grocery money and a freelance check hasn’t come in yet.
(Before you say, “Sarah, that’s not what an emergency fund is for, that’s what a car repair fund and a grocery budget are for,” keep in mind we’re at the beginning step of Dave Ramsey’s Financial Peace program (still). So $1K in the bank is always the goal, and then paying down debts.)
So you can imagine what this did to my banking habits: We save up $1K, but it’s never there for long. I always end up transferring $100 here or $300 there for different things that come up.
Enter: Saving Less, But For Long-Term
The past two months, I’ve started not transferring money into our savings account unless I was 100 percent, no-seriously, perfectly free from needing it. That means that when we have a $600 check come in, only $150 might go to savings and the rest would go in the intermediary fund waiting for the next surprise bill to come.
This brought about two seriously awesome changes:
1. The money in savings is truly, madly, deeply (get it?) there for savings.
2. I don’t have to transfer from the emergency fund because I’ve got a temporary fund to transfer from.
Obviously the goal is to not have surprises anymore because you’re budgeting for them elsewhere. But until we get to that magical land of money unicorns and coin baskets, this is where we are. And we’ve managed to build up that $1K, this time for good.