Even if you’re already saving your money in multiple accounts, for example in a 401(k), IRA, and personal savings account, adding on additional accounts can be an easy way to reach your savings goals faster without even thinking about it.
With the great annual interest rates and deposit bonuses offered by leading online savings accounts (compare high yield savings rates here) it’s silly not to start a new account!
I keep my money with ING Direct, which allows me to divide my savings account into multiple segments so I can save towards different goals at once!
1. Vacation – Vacations are for relaxing, don’t stress out over how you’ll afford it. Put aside $48.08 a week towards your next trip of $2,500.
2. Christmas – The holidays always sneak up on your wallet. Avoid a New Year’s spending hangover by popping $19.23 into an annual holiday spending account of $1,000.
3. Auto Maintenance – If your car is like mine, it will break down when you can least afford it. Be prepared for your next $500 repair by saving an additional $9.62 a week.
4. Weekend Escape – Spontaneous weekend trips are the perfect way to escape your routine. But just because the trip is spontaneous doesn’t mean the costs have to be. Try $11.53 weekly to plan for two $300 weekends a year.
5. Spending Splurge – Shoes, golf clubs, video games, jewelry; everybody has a weakness. Plan for a quarterly $400 splurge by saving $30.77 each week.
6. Moving – Whether you’re planning a move or not, expenses can add up. Make sure you have some cash on hand to cover movers and furnishings for your new dig. Just $7.70 a week will cover a $2,000 move every five years.
7. Taxes – Though it feels good to get a big refund check from Uncle Sam once a year, it’s better to owe the tax man because it means you can collect interest on that money in the meantime. Short your withholdings a bit throw $11.54 a week into a savings account instead to cover a $600 tax debt at year’s end.
What does it all cost? It would take $138.47 a week (or $600.04 a month) to save for all of these things. If that seems like a lot, consider the fact that these are things that you are likely paying for anyway, only you may be pulling money from other sources, or even going into debt to cover them.
But by saving a little every week, you’ll not only get the things you want for less, you’ll have something to show. That $7,200.48 you’ll save in a year will earn you $324.02 in interest at 4.5%. That’s another weekend getaway, a several nice dinners out, or a nice contribution to a bigger savings goal like a house or retirement!