31 Days to Financial Freedom, Day 8: Saving

We've never really had a "real" savings account the entire time we've been married.  We had an account at a separate bank that was supposed to function as our savings account, but it was always just a second account to draw money from if when we were short on money that month.  Most employers offer direct deposit now, and both Pen and my paychecks are directly deposited into our checking account.  $200 from every paycheck of mine goes into our "savings account".  Currently, $25 comes out of my paycheck for a bill I owe the hospital, but that will be paid off at the end of this month.  Once that's paid off, I'm going to add that to the $200 that goes to our savings account (which will actually be a savings account at that time!).

To me, financial stability is having money in the bank.  It's knowing that if my husband's car breaks down, we can afford to pay for the repairs.  If one of our kids is sick, we can afford to take the day off to be with them.  I feel secure when there's extra money; not because I can buy more stuff, but because I know we'll be able to get by for a while.

Our long-term goal is to have eight months of an "emergency fund" saved up, which will be about $30,000.  That's quite a chunk of change, especially for a family that faced overdraft fees on a weekly basis (up until 38 days ago, that is!).  It will be a slow crawl to get to that $30,000, but that doesn't mean it's unrealistic!

If I only put in $450 per month into savings, we will have $30,000 in less than six years.  Of course, that's if only I stop buying couches and breaking dishwashers.  If When I get a raise, I will appropriately adjust the amount that goes into savings, so we could perhaps reach that goal sooner.  But realistically, I'm giving us 10 years to reach that goal.  If we get there sooner, wouldn't that be an awesome accomplishment? 

We're also saving for our retirement, a little bit at a time.  Pen's long-term goal is to be a stay-at-home dad, so it will be my responsibility to save for our retirement.  Currently, $43.85 comes out of each of my paychecks for our retirement, and the hospital where I work matches a portion of that, up to 6%.  The $43.85 is not 6% of my salary, like they suggest, but I'm hoping I'll be able to increase that amount once we get our spending under control.

I'm very disappointed in that we have no savings for our children's future education.  I would love for my children to come out of school debt free (without the $33,099.25 elephant in the room), and I hope someday I can make that a reality.  But what's more important than that is their financial security right now, and I know that we just can't afford to start saving for that, quite yet.  But we can stress the importance of academics, and hope for a scholarship, right?!  I also believe that our children should pay for a portion of their education.  I know from experience that when my money was paying for my college, I put forth a lot more effort!

So . . . how do you start saving?  I would recommend taking a little out of your paycheck every week and just tucking it away.  It can be $25 or $400, depending on where your financial situation is.  We treat the money that comes out as a bill that is due the day I get paid.  I know the money is there if we really need it (like paying off a couch . . .), but it's not figured into our income, because it's a bill! 

The current balance in our savings account is right around $600.  On October 19, we'll have $800 and enough money to pay off the couch so we don't get sued!  Not getting sued rocks.