I hope you're having a great weekend!
This week has been a whirlwind and I didn't get a chance to finalize my "Dear Olga" column by Wednesday as I normally do. We'll be back to the regular schedule this Wednesday, thank you for bearing with me! 🙏
Saving With a Purpose
In January, I wrote a blog post about the importance of setting intentions for your savings. When you set specific intentions for your savings goals, it will be much easier to stick to your goals when you're tempted to be naughty.
For example, if you have $500 already saved for a vacation in 8 months, when you're tempted with an $100 spending spree you'll be less likely to spend because taking that vacation is important enough to you.
One strategy that I recommend to all of my clients and use myself is called the envelope system, it was made more popular by Dave Ramsey but has been around for decades because it works.
The idea is you have an envelope for each savings goal and by actively funneling your cash this way, you make tangible progress.
In 2019, there's one problem with this approach, who uses cash!?
As of 2018, roughly 18% of Americans use cash for all or most of their purchases. So how can you apply the envelope system in today's cashless world? 🤔
Enter Sub-Saving Accounts
Consider sub-saving accounts, with these accounts you can have one main savings account with multiple savings goals.
When you're holding your money with a bank that has arbitrary account balance requirements, this can be a great way to avoid being hit with fees each month.
Some folks who are already overwhelmed by money, don't want to worry about maintaining multiple accounts. This could be a practical solution!
Remember, before opening a new bank account be sure you're aware of any balance requirements and maintenance fees. If you're hit with unexpected fees on a small balance, it could eat up any progress you're making.
If you're intimidated by opening a new account and are interested in simple ways to build your saving habits check out this blog post about actionable strategies you can start using today.