At one time – after getting out of debt and before we purchased our new home – we had enough cash in our savings account for six months’ worth of expenses. We dipped into our savings account when we purchased our home, to purchase new appliances and some furniture.
The time has come to rebuild our savings account balance. We have created the following plan to increase our savings:
We set a goal.
Our goal is to stash six months’ worth of expenses in our savings account. We took a look at our budget, removed any obvious unnecessary categories, and then used that amount to calculate our savings goal.
We created a time-table.
One year. We have give ourselves one year to save up six months’ worth of expenses. A note about expenses: We are focusing on essentials, plus a few wants.
We have automated a monthly deposit.
Our paychecks are deposited at the end of each month. An automated withdrawal is then made to our online savings account. This money comes out first, before any other payments or purchases.
We will examine our monthly bills.
We are pretty frugal – but there’s always room for improvement. For instance – we recently realized we were eligible for an employee discount from our cellular provider.
We will use micro-deposits.
Like micro-payments helped us reduce our credit card debt, micro-deposits will help us build up our savings. We’ll look for ways to save, throughout the week, and make extra deposits to our savings account on Fridays.
We will pause – for just a few months – our aggressive mortgage debt reduction.
I hate debt, and can’t wait until we have paid off our mortgage. However, I think it’s important to rebuild our savings. So, we’ll still send an extra, principal-only payment to our mortgage company, but micro-deposits will go towards savings.
We will sell some stuff.
It has been a few years since we had a large yard sale or eBay purge. The time has come. We’ll sell some stuff and use that money to increase our savings account balance.
We will shop around for a higher interest rate.
This is just a hunch – but I have a feeling that interest rates will go up next year. If they do, we will transfer our savings, accordingly.
The past few years, we have adjusted to my new job and our new home. 2015 is shaping up to be an exciting year. We are excited about rebuilding our savings account balance. Blessings.