Saturday, March 10, 2018

Financial Preparedness: Do Your Savings Have a Name and a Purpose?

Do your savings have a name?  That’s what we’re going to talk about in this entry of our financial preparedness series. 

Do your savings have a purpose? 

Is it an emergency fund? 

Is it a ‘future house/home fund? 

Are you saving for an upcoming vacation? 

What is the purpose of your savings?   I've read that naming your savings goal and giving it a purpose helps keep you focused on saving, we've found that to be true for us.

Our savings has a purpose, in fact, it has a very specific purpose.   Since all our family live far away we are building a savings fund that will enable us to be able to go to them immediately should there be a reason.  It’s also the reason we purchase a gift card each month and stash it away.  Should we get a call that we need to go to one of our family members immediately and should it be at a time when we are low on funds , this emergency fund and the (restaurant) food gift cards that we’ve been purchasing monthly will enable us to be able to go and not worry about the financial end of it.   

Our other emergency fund is a general fund that will help replace or repair things that break down or need repairing in everyday life. 

So, we have a Traveling Emergency Fund and a General Emergency Fund.  We don’t do credit cards so we have had to come up with an alternate plan.  Sadly, in our society, not taking on debt takes work and thinking outside the box!   

What about you, do your savings have a name and a purpose?

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  1. I think the name idea is very good! We have an Emergency fund and sometimes we have a fund with a name like we had the Generator Fund. I have had Christmas Funds, Holiday Funds. Right now I am thinking of setting up a New House Fund (along with a new house glory box!)
    As you know I have had projects like to fill my empty cellar and make it an emergency pantry. I found small bits got me there amazingly fast. But over time my thinking changed as well about everything and now there are many things I would give up in order to add to a fund I am building or a project I am working on. We can get creative! If we are determined we can build a fund and it is so important. I am cheering you on! Love

    1. Annabel, I agree! We need to focus on our savings and continually be willing to make the sacrifices needed in order reach them.

  2. That is really a great idea to have those gift cards stashed for an emergency trip. One hopes to never need them but it is best to think that they may be needed one day.

    I keep our budget with paper and pencil so every budget category has a page in my notebook. The front of the notebook is all savings pages. We have to save for our state income taxes since it is not taken out of disability, next is our car replacement fund, a motor home savings fund that gets a tiny bit of money each month, then our big home repair savings and last our escrow to pay property taxes and homeowners insurance. The balance of what is in savings is our emergency fund.

    We know that we will be 105 before we get enough saved for a motor home but maybe one day it will work out. Eighteen years ago I had $6000 and asked God for a vacation house on the lake and He provided a 1/12 share in a house on a nearby lake for that amount in only 10 days. I still marvel over that every time we go there.

    1. Lana, there you go, never underestimate the power of God!!!

  3. Hello Patsy and a really good subject and yes we do have named emergency funds in our home.

    We have one in the bank which is called an emergency fund which earns a smaller interest rate, an at home cash garden machinery/car maintenance fund and of course a completely separate bank account for our house deposit savings that earns higher interest if we don't withdraw any funds from it. We also keep grocery gift cards in the home that we buy every 6 weeks which cover fuel and groceries we use with some extra that are purchased through our roadside assist club giving us a 5% discount. By having extra grocery gift cards it enables us to pick up specials we may see in off grocery shopping times and also gives us a buffer should something happen and have to use our normal grocery shopping budget for other things.

    Just today we went to go to church and our battery died after 9 years of faithful service in our car we purchased from new. We called our roadside assist club who we pay a small yearly subscription for (another form of emergency insurance) and they came out and changed our battery for us and because we were club members we got a $20 discount on the battery and because we paid cash it saved us another $5 in EFTPOS fees because we didn't have to use a card to pay.

    I cannot emphasise how important our savings and emergency funds are (especially a cash home emergency fund), as they have got us out of a lot of sticky situations over the years.


    1. Sewingcreations15, what an encouraging comment! Thank you for sharing, we too do several things similar to what you've talked about and are working on more. Inspiring comment!

  4. I've got several savings accounts, one goes by Tiny House savings, another is called Education and a 3rd is Vacation.

  5. Having separate funds is important if you want to save a lot. We have one years living expenses in our emergency fund, another for large purchases such as a car. We have a retirement account that we have to start taking money out when we are 70 1/2 and will pay taxes on. But we have a Roth also that we have already paid the tax on and do not have to take money out. This is for if we happen to live to be very old, or need a nursing home or can be left to our kids.

  6. In 2003, when my daughter was only a few months old, there was a black-out that stretched over a very large section of Canada and the U.S.A. I remember people trying to buy things, but no hydro meant no interact, credit card or gift card usage available. This event has had a lasting impression on me. Although I like your idea of gift cards, if there is no electricity, cash will work best. I would highly recommend keeping a stash of emergency cash, especially in smaller denominations, as a back up to those cards, just in case.

    1. Rhonda, I agree, our restaurant (food) gift cards are not for long term preparedness, they are for short term for when we need to travel.

  7. Just a thought here about stockpiling gift cards which we do too but it is a good idea to have a good amount of cash on hand in addition to the gift cards. If there is a disaster or wide spread breakdown in computer networks or such the gift cards will be useless. That is another part of our emergency fund.

    1. Lana, I agree, our restaurant (food) gift cards are for short term preparedness when traveling.


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