Category Archives: Money

Saving Intentionally: Why (and How) to Have More than 1 Savings Account

A 2017 GOBankingRates survey broke some alarming news: over half of Americans have less than $1000 in a savings account, and almost half of the people who fall in this category don’t have anything in a savings account at all. With almost 7 out of every 10 Americans having somewhere between absolutely nothing and just $1,000 in savings, there’s reason to be concerned about the ability of many Americans to pay for emergencies.

If you’re one of these Americans who doesn’t have a savings account, it’s time to start one. I’m sure you’re fully aware that emergencies come up, and emergencies often come with a hefty price tag. I totally sympathize with the assumed reaction here, which is that you just don’t have extra money to save. However, if you don’t think you have money to stick in savings now, you certainly won’t have the (much larger sum of) money to cover an unexpected expense.

Getting Started with Savings

Starting to save doesn’t require hundreds of dollars, especially if committing to save is going to require some serious budgeting shifting for your family. Even starting with just $20 and adding $5 a week is a great way to start forming healthy saving habits.

Looking for small things to cut out of your budget and redirect those funds to savings is a favor to your future self. I promise that while cancelling Netflix or choosing to eat meatless meals 2 times a week to cut back on the grocery budget might feel like a huge sacrifice in the moment, the sacrifice will seem much smaller when you’re better prepared financially for an emergency.

Many people who save have one checking account and one savings account. The checking account is used for daily expenses, and the savings account is where they stick money back for anything that might come up – an emergency, a vacation, a medical bill, or a down payment on a new house to name a few uses.

Savings accounts can be opened at your local bank or credit union, or through an online bank. It’s worth looking into an online bank for savings as they often have much lower overhead and are able to offer significantly higher interest rates than traditional financial institutions.

If you don’t think you have much money to save, there are lots of savings challenges to help you find a little money to save here and there. Challenges range from saving $1 each week to match what number of the year that week is (first week of the year = save $1, last week of the year = save $52) to saving 1 cent for what day of the year it is (January 1st = save 1 cent, December 31st = save $3.65), among others. You can do this with actual currency, or set up auto transfers from your checking account to savings.

Multiple Savings Accounts

While saving money is always a great practice, saving all your money in one account can be problematic. Let’s say you spend your entire savings account taking a beach vacation. You get home and find that your car won’t start in the airport parking lot. You have to pay to get it towed, and you later get a $500 bill from the mechanic for a new starter. You just spent all your savings on margaritas on the beach, how are you going to pay for this?

Having multiple savings accounts, each designated for something different, can help you avoid situations like this. Different savings accounts might include an emergency account, a travel account, a Christmas account, a vehicle account, or a home improvement account.

When you have multiple savings accounts with specific designations, you won’t spend everything you’ve saved on one expense. Of course there will be times than an emergency or an opportunity costs more than what the most closely designated account can cover, so it’s nice to have other funds to pull from in these instances.

Splitting what you can save into multiple accounts may mean it takes longer to reach your savings goals. However, it’s worth it to be able to treat yourself or cover an expense without it affecting your other savings goals.

Traveling on a Budget: Why Limited Income Doesn’t Have to Mean Limited Experiences

The idea that travelling the world has to be expensive is a myth. When done carefully, it’s absolutely possible to see the world without spending a fortune, which is good news for those of us who stick carefully to a budget every month. Saving for an international trip can take some time, but knowing that it’s possible to have great experiences on a low-budget trip is helpful.

Budget travel requires forfeiting some luxuries and conveniences, but it’s made up for in authentic experiences. You won’t be flying first class (in fact, you might be flying in a smaller than average seat on one of those budget airlines that would charge you for a beverage), you won’t be staying in a luxury hotel and eating at the finest dining establishments, but you will get an authentic look at a beautiful culture and get the privilege of engaging with its people on a more intimate level. These experiences are priceless.

Cutting Back Can Mean Authenticity

When travelling, it can be argued that the more you spend, the less authentic your experience within the culture will be. Spending more money, especially in a foreign country, will mean you’re staying in nicer hotels in nicer parts of the city, away from where the local people live and work. This isn’t necessarily a bad thing, but one of the best parts of travelling is the opportunity to engage in a new culture. Travelling on a budget means you are likely going to be able to engage with the people and culture on a much deeper level.

While there’s nothing wrong with hitting up major tourist attractions and landmarks when you visit somewhere new, don’t spend all your time where the tourists flock. Strike up a conversation with someone on public transportation or at a restaurant and ask them where they’d recommend you go for an authentic cultural experience. Talking to people and getting to know why where they live is special to them will often lead to far richer experiences than Googling “things to do in ___.”

Engage With Locals

The best advice for eating in a new culture is to look for where the locals are eating and order whatever they’re having. Getting away from popular tourist areas to eat is a great practice when travelling. Not only will you be able to find more authentic (and often more delicious) food, but it will likely come at a much lower price. If you aren’t sure what exactly you ordered for lunch, that’s okay. Sometimes it’s better not to know.

Save With Hostels

If you’re travelling alone or with friends, hostels are probably the most affordable lodging option. A hostel dorm bed can sometimes costs as little as under $10 a night. While you have less privacy, you have more money to spend on other things than a mattress, pillow, and shower. Airbnbs are often very affordable in other countries as well, which is a great option for couples who would like a little more privacy or travelers who want a comfortable place to spread out and call home during their stay. You can also rent a room in a local person’s house, which is another fantastic way to intimately engage with a new group of people and understand their culture on a much deeper level.

Travelling can really cost as much or as little as you’d like, to an extent. It’s important to remember that no matter where you go, there is a unique culture full of beautiful people who all have a story. Spending less money on your travel and intentionally spending your time truly engaged with the culture will provide an experience of a lifetime with limited expense.

How A Family Can Survive On One Income

So your family is thinking about going from two incomes to one? Maybe you’re having a kid and one of you will stay home with the baby. It might seem scary to think about losing a big chunk of your family income. I know a lot of people feel like they can never make it work, but it is possible on almost any income.

It just takes work. It takes planning and, in many cases, sacrifices. What exactly does that look like? Follow these nine steps and your dream of staying home with your kids and making it on one income will become a possibility.

  1. Plan

Making this adjustment will require planning for most families. It can be pretty difficult to go from two incomes to one overnight so start living off one income before you make the change. See how you are doing. See what sacrifices you are making and how comfortable that is for you. And while you are doing this, you get to save.

  1. Get your finances in order

This means you should have a budget. A budget allows you to prioritize what is important and what isn’t. You should also be debt free (or close). Whether it’s credit cards, student loans, or something else, debt will just be a drag on your ability to make it on one income. And finally, have a secure emergency fund. Life will happen, and you don’t want to go back in debt when the hot water heater goes out.

  1. Live within your means

Your goal isn’t to keep up with the Joneses. It’s to stay home with your baby. Make sure your biggest expenses- such as your house, your cars or travel- make sense for your budget and your lifestyle. After all, what is most important to you?

  1. Buy used

Craigslist. Facebook marketplace. Consignment sales. Whether it’s big ticket items like cars or furniture or maybe it’s just clothes, particularly kid’s clothes, buy used. You’ll save big and after a few months (or less) you won’t notice the difference.

  1. Shop for deals

Outside of your rent or mortgage, think of other big expenses every month or every year. Homeowners insurance (if you own your house), auto insurance, health insurance. Put some time in to looking for the best deals for what you need. That savings could go a long way.

  1. Look for free entertainment

You need to get out of the house, but, fortunately, not everything that is fun costs money. Focus on the free entertainment around you. Parks. Libraries. State parks. Maybe you live near the beach or a lake. There is a lot your family can do and memories you can make without emptying your wallet.

  1. Side hustle

Just because you are staying at home doesn’t mean you can’t make money. Maybe your employer will let you do some side work. Maybe you can freelance. Or you can be part of a multi-level marketing team.  You can watch kids at your house. There are lots of options today.

  1. Have some fun money

While you are making sacrifices, you also need to have fun. It should be within reason but have money for a date night or a fun activity with the kids. Or maybe there is just something you love that you don’t need but you don’t want to give up. That’s okay. This will help you stay grounded.

  1. Remember your why

This is what will make staying at home possible. Why are you doing this? What is your reason for staying at home? If you think about that, especially during difficult times, it will make it all worth it.