For my husband and I, saving is a huge priority. We’re in our early 20’s, own a home, and have a family already. There’s a lot that we need to be saving for. We have a strong budget set, and plenty of savings goals that we’re working toward.
Oh, and we’re doing it all on one income.
Some of our financial goals are to:
- Pay off Husband’s student loans
- Pay off Husband’s car loan
- Save for Daughter’s college fund
- Save for a couples trip/late honeymoon
- Pay off mortgage early
How do we manage that all on one income?
The key to successfully saving toward lots of different goals at once is having clear, written out savings goals. And committing to them.
Did you use SMART goals in high school? If you did, congrats! That incredibly annoying task is coming back to haunt you in your adult life. Yay! If you didn’t (or you didnt pay attention in AP English like me – bad Kayla!) here’s a refresher course:
*puts on teacher hat*
What is a SMART Goal?
Sorry for giving you flashbacks to high school English class. But stick with me!
When you know exactly what you want to do, how you’re going to do it, and when you expect to have the task done by, it’s MUCH more difficult to blow off your plans. Committing to your savings = actually saving!
For example, our “save for couples trip” goal looks more like this:
Save $2,000 for couples trip/late honeymoon by September 2020.
Specific (late honeymoon trip), measurable ($2,000), attainable (check!), realistic (notice I didn’t say it’d be saved by this December) and time bound (09/01/2020).
We know how much we want to save, and when we want to have it by. The goal was made in September of this year (2018) which gives us 24 months to complete it. That breaks down to $83.30/month, or just under $20 from each paycheck.
Keeping this goal in mind, how are we making sure we’re executing it? Enter the title:
Multiple Savings Accounts!
We have SEPARATE savings accounts for all of our savings goals. We also have separate savings accounts for different categories of our budget.
Why do we need multiple though?
So we can easily track/see our progress for each goal!
I can open up our bank’s app, and look right at the dedicated savings account to see the balance. This is much easier than balancing finances with only one savings account.
It makes transferring money from each paycheck easier, too! Tyler gets paid on Thursdays. So, on Thursday, I open the app and transfer the pre-determined amount for each account. It takes two minutes and I’m done. This helps with communication, too. Tyler can verify all the transfers I’ve made, so he’s also involved in our budget. This stops the weekly “did you put money aside for bills?” question.
This works so well with our zero based budget. With a zero based budget, every dollar has a place to go. In our budget, those “places” are separate accounts!
There’s a “Bills” account that our mortgage, gas & electric bill, internet, phone, car insurance, etc come out of. All of the money for those bills go there. We’re a month ahead on our bills, which means it doesn’t matter what week we put the money into the account. The money for this month’s bills was put in the “Bills” account last month. We no longer live paycheck to paycheck. Read my post on how we live on one income (linked above!) to see how you can, too!
We have a “Family” account that money for groceries and baby stuff goes into. This is how we manage to do one huge grocery shop at the beginning of the month! I stock up on diapers and baby wipes as needed with money from this account. We also budget to save money in this account for things like gifts, too.
This keeps our “emergency fund” separate from all other savings goals. With having multiple savings accounts we can clearly see where we’re at, and how much money we have for all of the things we’re saving for.
Before we had multiple savings accounts & functioned between just one checking account and one savings account, our savings never seemed to get above a certain point. I think we were so used to having X amount of money that when we had it, we felt like we could spend any extra beyond it. It was all psychological. Physically splitting up the money and giving all of our money a place to go makes it completely effortless to save.
Our credit union allows you to have several savings accounts for no additional fees. I’m honestly not sure how many is the maximum, but we haven’t hit it yet! Maybe one day they’ll tell us we’ve gotta stop adding new accounts. Check your bank or credit unions website out to see if you can start opening extra savings accounts up and splitting your money up too!
Would you be interested in seeing a real-life peek at our *actual* household budget?
If you’d find it helpful to see an actual real family’s budget, with REAL numbers, let me know! Leave a comment below!