A designation for my miscellaneous savings account and a PLAN.

Argh! My draft post is gone…! The page is blank! I am so frustrated right now… anyhow. I had a great post on the go about how I had a little switchemaroo with my savings accounts. Those of you that were paying attention may have already noticed the change in the sidebar. I will now attempt a rewrite… *sigh* 🙂

A designation for my miscellaneous savings account and a PLAN.

You see, now that I’m reading Dave Ramsey‘s Total Money Makeover (I am so sorry I’m starting to sound like a broken record here, mentioning this dude’s book in my last three posts, I swear I will stop after this one!) I’ve decided I am going to follow his plan to become debt-free by following the 7 baby-steps as outlined in the book, you can find an outline of them here. While I don’t agree with Dave to the letter I think this plan is great and will definitely work for me. I’ve previously read Your Money or Your Life by Joe Dominguez and Vicki Robin and it has become one of my favourite books even surpassing some of my favourite fiction. If you haven’t read the book I highly recommend you do! For me Dave’s book builds on what I’d previously learned and achieved after Your Money or Your Life.

Because of what I’m reading and learning I realized I needed to make a change in the way my savings accounts are were set up. This is the current set up;

Ally: Misc Savings, Goal $500
ING: Emergency Savings, Goal $1000
ING: Trip Fund, Goal $1000

I will be working on establishing a 3-6 month emergency fund over the next three years and since Ally pays more interest than ING (half a percent more) I figured the larger balance should be in the higher interest account. The new set-up will be;

Ally: Emergency Fund, Goal $500 – Achieved November 29th!
ING: Misc. Savings, Goal $500 on December 15
ING: Trip Fund, Goal $1500

Dave’s first Baby Step is saving up a $1000 emergency fund, at the moment my Emergency Fund is only $25.00 shy of completion and will be fully funded on next payday (November 29th). Because my income is on the lower scale I have decided a $500 emergency fund should suffice for the immediate future. (Not trying the easy route here, I have savings in my Misc. account for car repairs etc. insurance to cover other things, the trip fund can be depleted if needed and the Emergency Fund will truly function only for REAL EMERGENCIES)

Having completed Step 1 means I’m moving on to Baby Step #2! Thanks partially to Your Money or Your Life and many personal finance bloggers out there I have already tackled my credit-card debt, Baby Step #2 is tackling all debt except the mortgage and for me that means focusing entirely on my Student Loan! Pretty cool to consider I ‘only’ have one loan to focus on.
I do anticipate this step to take quite a while, I have set a conservative estimate of graduating and paying off the Student Loan in March/April 2013 but I should be able to do this sooner. This means I won’t bore you all with long and technical musings such as today’s posts too often. I do hope I won’t get frustrated and discouraged too quickly… two years is a long time!

I’m quite excited about all this, the thought of becoming debt-free is just… unimaginable and the last time I had this amount in total savings I ended up spending it on 4 wisdom teeth extractions. Since I already had appendicitis, all wisdom teeth removed and a chipped tooth repaired a few months ago too… I really don’t think I will have any more health related incidents the next little while… I mean, that’s enough for one year right?

Published by Renée

I write about my life, travel and my financial up and downs on my blog, Nickel By Nickel, while contradicting myself daily. ;)

Create your website at WordPress.com
Get started
%d bloggers like this: