With the new year, hubby and I really have to ramp up our emergency savings. We had a small savings set aside before baby girl was born but I was put off work six weeks earlier than we were expecting due to some pregnancy complications. It was stressful to say the least but I was physically unable to do my job anymore so I didn’t have a choice, sucking it up for the reminder wasn’t even an option.
Since we’re experimenting with a cash budget we toyed with the idea of withdrawing the cash for our savings as well and set the money aside each week, especially since I wanted to try the 52 week savings challenge that is floating around the web.
I quickly saw the flaws in this money management plan and decided it probably wouldn’t be a smart idea to have cold hard cash floating around our home. What if we had a fire? What if something happened to us outside of the home and we couldn’t get to it? Needless to say, using a savings account to save our money makes much more sense.
We’re in the process of deciding what type of account to use since there are so many options. We also need to decide to use our normal bank or an online type of account where the money wouldn’t be as easily accessible, either way our money will be much more secure in a bank account than under our mattress!
When I was reading Gail’s book she has a rule that states ”if you’d pick it up off the ground then it’s worth it” I’m paraphrasing, but her point remains that people often pass up on opportunities…like gaining interest in a savings account for emergency funds…I could say, I’d only gain like $30.00 a year in interest (or whatever) so I’m not going to bother, since it’s only $30.00; but if I saw $30.00 laying on the ground you better believe I’d pick it up so why wouldn’t I put my money into a savings account where I can gain interest, even if it’s $5.00 a year, I’d pick any amount off the ground so I’ll take it!
For people who have emergency funds established, what type of account are they in? Who else loves the ‘pick it up off the ground’ rule?