Do you have a savings account?

[Junket]

I look at is like this Frasbee... how much do I have when I'm not there to spend it? It's a fail safe in case I break down and do spend money from the savings account.

At the end of the year the money from the IRS goes into a real savings account to accrue interest.

It's just another strategy to save money from a different angle. I'm a firm believer in redundancy... especially when it involves money. If shit hits the fan and I have to empty my bank account... come the end of the year, I still have additional funds via the IRS to help me start over.

I can't comprehend that.

It would make more sense to have money automatically deducted from your checking to your savings to accrue interest over a longer term than to wait for a large lump sum.

It's like hiding the cash in your mattress only to be deposited at the end of the year.

Plus if the shit hits the fan, or you have that "rainy day", it's better to have some reasonable access to your hard earned money than to wait for your tax return.

Then again, like I said, I can't comprehend people who can't resist buying stuff. If that's the way you "have" to do it, then I guess it's better than nothing.

I just feel like there are much more effective ways of setting that money aside that you're over looking.

Do you have a budget?

[doppelgaenger]

I have 4 bank accounts; a savings and checkings in 2 different banks. I have 2 pairs of accounts; one which I use regularly, and one which I use as a backup for last resort purposes. None of the accounts are linked so that I protect myself from foolish spending and fraud (In case someone gets ahold of my information) I always deposit into savings, and I hoarde my money in those to earn interest off of it. I don't have to worry about bouncing checks or overdrafting my checking accounts, because I have 2 credit cards for each checking account, which all overdrafting automatically goes into. I transfer money up to 5 times per month from savings to checking to give myself an alotted sum to spend.

I don't have CDs and I don't invest or throw money into the stock market (yet) I will eventually, when I actually have a job, and when I have time to see what's available to invest in.

[Aeradalia]

I can't comprehend that.

It would make more sense to have money automatically deducted from your checking to your savings to accrue interest over a longer term than to wait for a large lump sum.

It's like hiding the cash in your mattress only to be deposited at the end of the year.

Plus if the shit hits the fan, or you have that "rainy day", it's better to have some reasonable access to your hard earned money than to wait for your tax return.

Then again, like I said, I can't comprehend people who can't resist buying stuff. If that's the way you "have" to do it, then I guess it's better than nothing.

I just feel like there are much more effective ways of setting that money aside that you're over looking.

Do you have a budget?

I do have a budget... however, I am in a very unstable time of my life at the moment... So most of my plans are geared towards being able to recover from a crisis... not so much for long term saving.

Also, these were strategies put in place when I was married --- my ex was very, very bad with money -- thanks to him, I have much debt to pay off (was in both of our names... and I'm trying to repair my credit).

It's not easy to build much of anything when all you are dependent on is very unstable.

[doppelgaenger]

I avoid using credit altogether... and if I do, I pay it off ASAP. I *hate* owing money. I had to purchase a $60 train ticket the other day and I am impatiently waiting for the bill to come.

[Junket]

I don't see how any of that has anything to do with utilizing a more efficient means to save.

In one case, you have an entity (government) that automatically takes money you earn and then deposits it back to you free of interest at the end of the year.

In what i suggested, you have an entity (bank), that automatically takes money you earn then deposits it into an interest bearing account, that you would ideally leave virtually untouched. This is a win-win situation, because you can even ensure the same amount the government is taking out, is what the bank is putting in, only you'd already be making money off it from the very first deposit.

Look at it this way, it would be 1 more thing in your life that you could feel secure about. You're making money, your money is working for you, and it's there if you ever NEED it. Which is better than maxing out your credit cards, especially if you're trying to fix your credit.

[Gribble]

I've never bought anything on credit, not even my vehicles. I suppose I may eventually buy a house but until then I refuse to willingly shackle myself.

[Junket]

I don't see credit (cards) as a shackle, but I treat it like I would my checking account. A finite amount of money based on my income and what I can afford.

[Aeradalia]

I don't see how any of that has anything to do with utilizing a more efficient means to save.

In one case, you have an entity (government) that automatically takes money you earn and then deposits it back to you free of interest at the end of the year.

In what i suggested, you have an entity (bank), that automatically takes money you earn then deposits it into an interest bearing account, that you would ideally leave virtually untouched. This is a win-win situation, because you can even ensure the same amount the government is taking out, is what the bank is putting in, only you'd already be making money off it from the very first deposit.

Look at it this way, it would be 1 more thing in your life that you could feel secure about. You're making money, your money is working for you, and it's there if you ever NEED it. Which is better than maxing out your credit cards, especially if you're trying to fix your credit.

I don't have any credit cards... never did.. my ex did though... The credit I'm trying to repair will be for later on in life... as I don't see myself going forth and becoming a millionaire any time soon.

It doesn't have anything to do with an efficient means to 'save' because the money will not stay long enough to accrue any meaningful amount of interest anyway... Most of the money is saved for a month's time before it has to be spent...

I have one savings account which isn't there for college, a house, or anything like that --- it's there for a very rainy day.

Point in case.. my ex filed a suit against me.. if it wasn't for the savings account I 'never' touch... I wouldn't have had any means to defend myself. I won, and am now waiting to save up once more... since my ex made threats to attempt another suit.

This 'savings' account is there to help with the medical difficulties I now have.. thanks to having such things neglected over the years... thus made worse and harder to ignore.

As I said, my life is very unstable right now... I have much debt to repay, a half-crazed ex that wishes to destroy me, medical problems that will not abate, and a need to live for the 'here and now'... at least until I can get a handle on things.

I understand the logic of your strategy... but fail to see how it applies to the short-term theme of my life at the moment.

[Junket]

I can see how that would change your perception on the worthiness of an interest bearing account.

I still can't see how having the government take out more in the here and now is going to be of any benefit to you, though.

You don't need to explain it to me, I'm just stating my point of view.

[vashti]

Be careful with that "savings" plan, aeradalia. Government agencies CAN run out of money. The State of California is actually handing out I.O.U.s to people they owe money to...

[IndiReloaded]

My son has a savings account and some GICs. Generally, the return on such things are rather low.

When we were your age, Fras, we put as much money as we could into GICs (forgot the US equivalent name) and stuff like index funds in a tax-sheltered retirement fund. This way, not only are you saving, but you are reducing your taxes. Then, once we stopped being students we borrowed out of our fund to pay for our first house without tax penalty. I imagine the US allows something similar.

[Junket]

I wouldn't know the what the equivalent is...where is Skorp?

[IndiReloaded]

He's definitely someone who would give the best advice on this, Fras. I think it might be called a 'term deposit' but I'm not certain.

I can only tell you what worked for us: frugal living as students, no student loans, public transport until we absolutely needed a car, decent but stable investment for a car & house. Credit cards but only for emergencies.

Things changed once we were no longer students, but that's basically how we did it.

[Lipp]

Living day by day right now, got zilch to save up. Oh well, in a few years Ill know if it was worth it.

[Cbrider]

You're a better man than I ... in college, I invested in beer and motorcycles!

I wouldn't be surprised if you're a long lost family member related to me by blood.

I am already moving money around and playing with numbers, I plan on buying a CBR1000RR this coming January.

I have a significant amount of money in stocks right now, but I avoid looking at them, theres enough stress in one day without checking what you netted in monetary losses.