This post was originally published on Budgeting in the Fun Stuff as a guest contributor.

Growing up in a frugal family that saved a small fortune on a conservative fireman’s salary, one would think I’d follow in these similar footsteps and end up the ultimate uber-saver. Not so; as life would present too many tantalizing baubles and opportunities to spend my hard-earned money on. I could blame my deprived childhood, due to extreme frugality, on my poor savings habits and psycho-analyze my behavior as trying to make up for things I missed out on as a child. But let me be realistic and honest; I let spur of the moment opportunities seize my usually money-conscious brain and talk myself into freak lapses of budget-blowing insanity. Instead of sticking to my guns and meeting my saving goals, at the end of year I look at the paltry amount I’ve accumulated, and vow to do better.

This year I’ve come up with a plan to meet those goals through some extreme, at least for me, strategies. Some of these ideas I’ve gleaned from reading personal finance blogs, others I’m making up as I go and I’ll review their effectiveness at the end of the year based on if they saved me money or just wasted my time.

Savings “Bins”

I currently have 3 different savings accounts with small amounts in each and think this is because I haven’t really labeled most of them for specific purposes.  Although the one I’ve labeled, “sister’s wedding fund”, I’ve  found that I’ve been quite diligent in sticking a set amount every month in that savings account and keeping my grubby little paws off of it since it has a particular purpose. Obviously, this method is working for me. Now all I have to do is label the other two accounts and set a specific monthly savings amount.

I’ve decided that the one I can get to most easily needs to be my slush fund/emergency account. My goal for this account is to continually keep at least one month’s total amount of bills.  However, the hurdle with this account is because my income fluctuates from month to month, I sometimes need to dip into the slush to pay for upcoming bills. I’ll have to review this account over a quarterly period instead of month to month.

The online savings account that is a little more difficult to touch will be my long term savings account, or “house” account. Since one of my big goals is to own a house within the next 3-5 years, I need to devote as much money as I can to this account if I ever want my dream to materialize. A realistic goal is to set aside double what I’m already depositing. This will be the tricky part as I find myself coming up short of this past year’s savings amount.

To meet these savings goals, I’ll have to really reign in my budget and find out where it’s “leaking.”

Status: Having 3 accounts for specific purposes has been working out quite well. I haven’t been meeting the monetary goal I had originally set for each account, but it’s a start.

Finite Gift Cards

A few of the “leaks” I’ve noticed include over-spending on our daily habits. These habits appear to be budget-breakers, so to help me reduce over spending, I’ve decided to use a couple of strategies:

  1. A pre-determined and limited gift card
  2. A Starbucks card

My Starbucks Gold card can be loaded at the beginning of the month with a set amount on it. Instead of loading it whenever it runs out, I will load it on the first of the month and when it’s gone, then it’s time to make my own drinks from home. Setting a pre-spending limit will keep that part of my budget intact.

The next part of the budget that needs some work is my husband’s habits. Instead of letting him swipe his debit card whenever he needs a pack of cigars, he’s going to be given a finite gift card that I’ll load on the first of the month. He’ll have to make that baby stretch for the entire 30-day period.

Another great idea for using gift cards for everyday purchases, is finding discounted gift cards for sale at store I regularly visit. If I can purchase a $40 gift card to a store for $35, that’s a savings of five bucks.

Setting finite amounts at the beginning of the month should plug up the holes I’m finding and allow me to save enough for my “house” fund.

Status: I never started the gift card strategy, but I’ve been really good about putting a predetermined amount on my Starbucks gold card. I’m spending quite a bit less at Starbucks this year because of this strategy.

Go, Cash, Go

Another leak I’ve noticed is the amount of money we spend eating out, even at fast-food places. A few dollars here and there never seems like a lot at any one time, but those dollars begin to add up and all of a sudden it amounts to a large portion that could have been stuck into my emergency fund.

To fix this leaky sieve, meals out will have to be cash-only. Since I’ve already budgeted a portion of my monthly income towards meals, this amount will be set aside in my Mason jar at the beginning of every month. When the cash runs dry, bye-bye McDonald’s cheeseburgers.

Status: A total and utter failure. I’ve realized I’m just not good with cash. Not only do I hardly ever have any on hand, when I do I have no clue where it goes. On a side note, loose change does end up in my Mason jar and we used that amount this year for our Sequoia camping trip.

Overflow Buckets

Since I use Quickbooks to track my spending and income, I noticed that I made a few thousand dollars more than what I had originally budgeted for the year. But darned if I can’t find that extra amount I made! Where, oh, where did that extra cash go? It seems to have evaporated into the abyss of  the colorful pie charts that track my expenses and income.

This coming year, with a few safe-guards in place (finite gift cards, cash, and purposeful savings accounts) this overflow of income should end up in my emergency fund at the end of a fruitful month. Since the “house” account, “sister’s wedding” account, and the “ER fund” account will already be set aside at the beginning of each month, any extra savings at the end will be moved to the ER fund. That way the overflow of cash will be saved and not spent.

Status: I’ve been really good about putting extra money into the overflow account and sometimes transferring any left over to the ER fund. Not as frequently as I would have liked, but again, it’s a start.

Group Support

Finally, without anyone keeping tabs on me, I might quickly revert back to my old-self. Posting monthly or quarterly updates on my progress for each of these tactics will help keep me following my own advice. Hopefully by mid-year I’ll notice a huge improvement in my savings accounts.

Status: I found a little tracking widget that I use and update each quarter. So far it’s been moving in a positive direction. However, not working this last quarter of the year (finishing school instead) will probably mean little to no progress over the next 3 months.

Would these tactics work for everyone? It depends on how budget-conscious one is and if one is willing to keep track of their income and expenses diligently. Will these strategies work for me? I’ll let you know by mid-year.

Status: These have definitely worked for me, but I  know I can still do better. Next year, I’ll definitely continue with most of these strategies (minus the cash and gift card one) and continue to make progress.

How have your annual goals been going?

12 Comments

  1. I’ve never heard the prepaid gift card as a savings strategy but I like it- especially since you won’t incur fees for overdrafting. All of my savings is automated between various accounts. Since my mason jars refuse to pay me interest I use them strictly for sweet tea. Eating out is my splurging but I enjoy eating like a king, so I’m not ready for lean cuisine just yet.

    • @Funancials – That’s so true, my Mason Jar doesn’t pay me interest either. 🙂 I’ve gotten better at automating my savings, but this is something I’m going to focus on next year.

  2. This is great to not only see the strategies but also to see the updates on how well they were applied.

    For me, I work primarily in cash. In fact, I only have a handful of things that are on automatic debit from my checking account. What I found, for me, anyway, is that I tend to forget that I have the debit coming and will forget to make sure I leave enough into the account. Then the dreaded overdraft would happen.

    The biggest money saver I’ve found is eliminating overdrafts and late fees. At one point, I was spending $500 to $1000 a year in fees. Once I started paying more attention to what I had, and got rid of some of the things that were coming up “unexpectedly”, I started having more money to work with.

    Thanks for sharing!

    • @Grady – Over draft fees are no fun, I know that first-hand! However, I’ve set up an account that has an over-draft protection. It still costs money if they have to pull from it, but it’s a third the cost. Thankfully, I’ve gotten really good at micro-managing my bank accounts and haven’t had an overdraft fee in a very long time!

  3. krantcents Reply

    I make savings a priority and set up a payroll deduction. I find it easier to do that and it is automatic. I started doing this roughly 40 years ago.

    • @Krantcents – That’s smart. I’m still working on the automated thing. If I can land a steady job next year, it will be a lot easier!

  4. Hunter @ Financially Consumed Reply

    I like segmenting savings for specific purposes too, much like your bins strategy. It helps me focus and reach those goals more effectively. I’m looking forward to the next update.

    • @Hunter – I like being organized and having set goals. Without those in mind, I’m much more likely to just spend the money instead.

  5. Matt @Financial Excellence Reply

    Good tips. Not everyone is a natural saver. What works for one persona might not work for others so it’s cool to see other ideas.

    • @Matt -That’s so true. I consider myself a saver and not a spender, but living on an erratic income just makes it more challenging.

  6. Miss T @ Prairie Eco-Thrifter Reply

    We have recently implemented savings bins in our financial plan. We have some specific things we want to pay for and therefore we have made a savings account for them. It seems to be working out quite well.

    • @Miss T – I’m always tweaking how I’m saving. I love my separate accounts, but I’m thinking I need to make it easier by having them at one bank instead of two. That would make transferring money easier. That might be my next move.

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