How do you save for multiple goals
August 21, 2022 6:47 AM
... without everything in a big pool of undifferentiated money? The goals often on-going like general home repair and redecoration.
Partner and I are at the point where we can start saving for specific goals, instead of "save as much as we can and pay off the big expenses as they crop up with occasional bouts of splurging." Goals are handling deferred house maintenance/renos, vacations, replacing furniture, and a "mad" money fund.
Structure, routine, and automation really help me; money already transfers automatically into savings. Before WFH, I'd get out cash for lunch, etc. after getting paid, and that would last until they next check. Mostly. I try to splurge after paying the month's bills, when I'll reward myself with books or other things I've been eyeing.
Tell me what you do and what you've tried and how it works for you!
[Side rant: why can't my bank app also be lightweight budgeting tool that allows me to earmark savings and set goals?]
Partner and I are at the point where we can start saving for specific goals, instead of "save as much as we can and pay off the big expenses as they crop up with occasional bouts of splurging." Goals are handling deferred house maintenance/renos, vacations, replacing furniture, and a "mad" money fund.
Structure, routine, and automation really help me; money already transfers automatically into savings. Before WFH, I'd get out cash for lunch, etc. after getting paid, and that would last until they next check. Mostly. I try to splurge after paying the month's bills, when I'll reward myself with books or other things I've been eyeing.
Tell me what you do and what you've tried and how it works for you!
[Side rant: why can't my bank app also be lightweight budgeting tool that allows me to earmark savings and set goals?]
You Need a Budget aka YNAB has been the best thing that's ever happened to my finances and is really handy for saving up for specific goals (and then changing things as you go along based on which goals become more or less urgent).
posted by rubbish bin night at 6:55 AM on August 21, 2022
posted by rubbish bin night at 6:55 AM on August 21, 2022
I have several online savings accounts labeled for each goal, eg emergency, apartment, vacations, etc. I set up automatic deductions into each one, which I adjust as needed. I have mine with Capitol One, which bought whatever online bank I started with. I love having this set up because I can spend money without guilt or debt.
posted by Mavri at 6:55 AM on August 21, 2022
posted by Mavri at 6:55 AM on August 21, 2022
Hi!
I don't think what I do is the colloquial solution (which maybe involves some kind of spreadsheet and... Actual discipline?) But it works for us!
We use one bank account (at Alliant for the 2.5% cash back) and we have 11 checkings/savings accounts, as follows:
Income pool
Bills
Financial goals
Charity
House fund (renovations, furniture)
Groceries and pets
Travel
Bbqturtle spending cash
Mrs bbq turtle spending cash.
Emergency fund (defunct)
On the 28th of every month, 10 reoccurring transfers happen between income pool and all the other checking/savings accounts. I check everything once a month to make sure we aren't overdrawing anywhere, or to transfer money to our brokerage, or to make sure our credit card isn't higher than our personal spending accounts. But... It works great for us!
posted by bbqturtle at 6:57 AM on August 21, 2022
I don't think what I do is the colloquial solution (which maybe involves some kind of spreadsheet and... Actual discipline?) But it works for us!
We use one bank account (at Alliant for the 2.5% cash back) and we have 11 checkings/savings accounts, as follows:
Income pool
Bills
Financial goals
Charity
House fund (renovations, furniture)
Groceries and pets
Travel
Bbqturtle spending cash
Mrs bbq turtle spending cash.
Emergency fund (defunct)
On the 28th of every month, 10 reoccurring transfers happen between income pool and all the other checking/savings accounts. I check everything once a month to make sure we aren't overdrawing anywhere, or to transfer money to our brokerage, or to make sure our credit card isn't higher than our personal spending accounts. But... It works great for us!
posted by bbqturtle at 6:57 AM on August 21, 2022
I have several separate savings accounts and for a long time I would do automatic withdrawals into each of them each payday.
I stopped doing that recently because seeing one bigger number in one account started to feel more motivating to me, but I still have all the accounts and I might go back to that system.
posted by nouvelle-personne at 7:18 AM on August 21, 2022
I stopped doing that recently because seeing one bigger number in one account started to feel more motivating to me, but I still have all the accounts and I might go back to that system.
posted by nouvelle-personne at 7:18 AM on August 21, 2022
why can't my bank app also be lightweight budgeting tool that allows me to earmark savings and set goals?
Because you’ve got a crappy bank? Seriously, i bank through a tiny, five-branch local credit union, and they offer tools like this.
Multiple sub-accounts and automatic transfers are going to be the answer for you.
posted by kevinbelt at 7:21 AM on August 21, 2022
Because you’ve got a crappy bank? Seriously, i bank through a tiny, five-branch local credit union, and they offer tools like this.
Multiple sub-accounts and automatic transfers are going to be the answer for you.
posted by kevinbelt at 7:21 AM on August 21, 2022
You don't have to differentiate every fund separately, but it helps to differentiate "splurging".
My wife and I have a joint bank account for household expenses plus individual accounts for each of our "fun money". We deposit our paychecks straight into the shared bank account, but also automate a monthly transfer from there to each of our "fun" accounts at the start of every month.
What we do with our fun money is entirely up to each of us.
posted by splitpeasoup at 7:29 AM on August 21, 2022
My wife and I have a joint bank account for household expenses plus individual accounts for each of our "fun money". We deposit our paychecks straight into the shared bank account, but also automate a monthly transfer from there to each of our "fun" accounts at the start of every month.
What we do with our fun money is entirely up to each of us.
posted by splitpeasoup at 7:29 AM on August 21, 2022
+1 YNAB. It makes it really easy to save for specific things in various ways -- e.g., I want to put $X in here each month vs. by 2024, I want $X here vs. for Christmas, I want to save and spend a total of $X. What I appreciate about YNAB is the ability to re-categorize goals pretty easily (e.g., smoosh all these computer goals together), as well as see how much you actually spent against these goals in the past.
posted by ellerhodes at 7:32 AM on August 21, 2022
posted by ellerhodes at 7:32 AM on August 21, 2022
PS: for instance, I can blow my monthly fun allowance on gummy bears if I wish, or save for months and years to get myself something expensive. We're not allowed to judge each other's splurging choices.
Meanwhile the common money is used for mutually agreed on expenses: housing, groceries, transit, kid, repairs etc. At the end of the year we try to give anything we don't need to charitable orgs. All such decisions must be mutually agreed.
So in addition to separating fun money from household expenses, our system also avoids marital conflict regarding money.
Occasionally we adjust our monthly "fun" allowance. For example, we are in the process of reducing it right now because we need to tighten our belts at the moment.
posted by splitpeasoup at 7:38 AM on August 21, 2022
Meanwhile the common money is used for mutually agreed on expenses: housing, groceries, transit, kid, repairs etc. At the end of the year we try to give anything we don't need to charitable orgs. All such decisions must be mutually agreed.
So in addition to separating fun money from household expenses, our system also avoids marital conflict regarding money.
Occasionally we adjust our monthly "fun" allowance. For example, we are in the process of reducing it right now because we need to tighten our belts at the moment.
posted by splitpeasoup at 7:38 AM on August 21, 2022
Another vote for multiple savings accounts that automated savings payments go into within a few days of getting paid.
50% of the money I save each month goes into my general liquid emergency fund, 25% into my vacation pot and 25% into my no-specific-purpose-except-hopefully-not-being-poor-when-I'm-old investment account where it gets split across a few different ethical index funds. I'm not super disciplined about keeping the liquid emergency fund for true emergencies only, and also use this money for things like furniture and regular lump sum payments like paying for my car insurance annually instead of monthly with interest.
As soon as I hit my target for the liquid emergency fund (hopefully in the next six months or so), that chunk of savings is going into the account where I have money set aside with the intention of paying for top surgery in the next couple of years. If there's any money left over in my current account at the end of the month, that gets transferred into the top surgery fund too (and I want to not have tits before I'm 40 badly enough that this is currently a prettty strong motivator against mindless overspending on eating out and random shit from Amazon). Once the surgery is paid for, the next priority for that money will probably be putting aside enough to eventually replace my car.
My vacation fund and liquid emergency savings accounts are both linked to my main bank account, while the top surgery fund is linked to my second bank account because their interest rates are more favourable right now. The investment account is via Fidelity.
For some reason, the YNAB 'every unit of currency has a job' model doesn't work as well for me as the x% on needs, x% on wants & x% on savings/debts model (and I'm also super fortunate not to have any debts beside my mortgage); for me right now this is close to a three-way split with a third going on obligations (mortgage & other bills I have no choice about paying), a third going on keeping my household fed and clothed and entertained, and a third going into savings.
It sounds like you need to figure out the weighted percentage you want to give to your savings goals, then divide up your regular automated savings across several different accounts according to those weightings, similar to the snowball/avalanche models for dealing with debts. So if home renovations are your top priority, the biggest chunk should go into that account, followed by vacations, furniture, etc.
I think it's helpful to be mentally flexible about this stuff too, if possible. My vacation fund was originally intended to buy a boat, untill I realised I don't actually want to buy a boat in the next few years. I still kept the account and the regular contribution, but spent some of it on a new computer when I needed one, and the rest on vacation stuff until it mentally became the vacation account. Which now means I no longer need to rob the liquid emergency fund to pay for vacations.
posted by terretu at 8:13 AM on August 21, 2022
50% of the money I save each month goes into my general liquid emergency fund, 25% into my vacation pot and 25% into my no-specific-purpose-except-hopefully-not-being-poor-when-I'm-old investment account where it gets split across a few different ethical index funds. I'm not super disciplined about keeping the liquid emergency fund for true emergencies only, and also use this money for things like furniture and regular lump sum payments like paying for my car insurance annually instead of monthly with interest.
As soon as I hit my target for the liquid emergency fund (hopefully in the next six months or so), that chunk of savings is going into the account where I have money set aside with the intention of paying for top surgery in the next couple of years. If there's any money left over in my current account at the end of the month, that gets transferred into the top surgery fund too (and I want to not have tits before I'm 40 badly enough that this is currently a prettty strong motivator against mindless overspending on eating out and random shit from Amazon). Once the surgery is paid for, the next priority for that money will probably be putting aside enough to eventually replace my car.
My vacation fund and liquid emergency savings accounts are both linked to my main bank account, while the top surgery fund is linked to my second bank account because their interest rates are more favourable right now. The investment account is via Fidelity.
For some reason, the YNAB 'every unit of currency has a job' model doesn't work as well for me as the x% on needs, x% on wants & x% on savings/debts model (and I'm also super fortunate not to have any debts beside my mortgage); for me right now this is close to a three-way split with a third going on obligations (mortgage & other bills I have no choice about paying), a third going on keeping my household fed and clothed and entertained, and a third going into savings.
It sounds like you need to figure out the weighted percentage you want to give to your savings goals, then divide up your regular automated savings across several different accounts according to those weightings, similar to the snowball/avalanche models for dealing with debts. So if home renovations are your top priority, the biggest chunk should go into that account, followed by vacations, furniture, etc.
I think it's helpful to be mentally flexible about this stuff too, if possible. My vacation fund was originally intended to buy a boat, untill I realised I don't actually want to buy a boat in the next few years. I still kept the account and the regular contribution, but spent some of it on a new computer when I needed one, and the rest on vacation stuff until it mentally became the vacation account. Which now means I no longer need to rob the liquid emergency fund to pay for vacations.
posted by terretu at 8:13 AM on August 21, 2022
I am also a person with a bunch of different savings accounts for this. My bank lets me set up digital-only savings accounts with almost no effort, and my husband also contributes to some of them. So we have a holiday fund, a home improvement fund, a cat care fund, an emergency fund, and personal savings accounts.
I also have a separate credit card thats just for all my "fun" money, so I can see exactly what I've spent this month at a glance rather than having to do math, remember which debits have come out etc etc. ( Obviously I stick to a strict budget on that and pay it off every month, no interest paid) It's by far the easiest way I've found to pay attention and stick to a spending budget, actually.
posted by stillnocturnal at 8:44 AM on August 21, 2022
I also have a separate credit card thats just for all my "fun" money, so I can see exactly what I've spent this month at a glance rather than having to do math, remember which debits have come out etc etc. ( Obviously I stick to a strict budget on that and pay it off every month, no interest paid) It's by far the easiest way I've found to pay attention and stick to a spending budget, actually.
posted by stillnocturnal at 8:44 AM on August 21, 2022
My credit union lets us have sub accounts. I have one for bills, retirement savings, taxes and savings. My dad used to have the same type of set up, renovations, vacation, bills, Christmas club, etc.
posted by kathrynm at 10:06 AM on August 21, 2022
posted by kathrynm at 10:06 AM on August 21, 2022
So you have Needs and Savings covered and this is budgeting Wants at different scales?
Abstractly, my spouse and I have (separately and jointly) three levels of Wants allocations: walking-around money for the month; planned expenditures that we put aside proportionate money for monthly, whether they're monthly bills or not; and a pile of "Big Fun" money to support more ambitious Fun on a totally unclear schedule.
I don't think there's an objective rule for what the relative sizes of those three Wants piles should be, or what goes in each. But it's all fun, so you can re-allocate.
Semi-abstractly, you need to know what money you have has been allocated before you know you can spend any on Wants. Maybe you can use whatever system you already use for Needs and Savings? How do you manage regular vs sporadic vs irregular bills?
Concretely, I do very precise accounting both of my money and the joint household money in
My spouse hates doing precise accounting, and because I do the household accounting they don't have to. With each paycheck they auto-transfer their share to the house account, and a proportion to their savings, and I think to a Big Fun account, and then they happily spend until their checking account is empty and then stop.
posted by clew at 12:10 PM on August 21, 2022
Abstractly, my spouse and I have (separately and jointly) three levels of Wants allocations: walking-around money for the month; planned expenditures that we put aside proportionate money for monthly, whether they're monthly bills or not; and a pile of "Big Fun" money to support more ambitious Fun on a totally unclear schedule.
I don't think there's an objective rule for what the relative sizes of those three Wants piles should be, or what goes in each. But it's all fun, so you can re-allocate.
Semi-abstractly, you need to know what money you have has been allocated before you know you can spend any on Wants. Maybe you can use whatever system you already use for Needs and Savings? How do you manage regular vs sporadic vs irregular bills?
Concretely, I do very precise accounting both of my money and the joint household money in
ledger in a text editor and at the commandline, with budgets and automatic budget allocations. That's rather like YNAB. I prefer ledger because I think it does yours-mine-ours budgeting better than YNAB, and its view specifically of past reallocations is really useful to me, but YNAB may be easier to start with (I did). This means I don't need separate accounts at the bank for different goals, though it is very important to regularly check that the budgeted money I think I have adds up to what the bank thinks I have! My spouse hates doing precise accounting, and because I do the household accounting they don't have to. With each paycheck they auto-transfer their share to the house account, and a proportion to their savings, and I think to a Big Fun account, and then they happily spend until their checking account is empty and then stop.
posted by clew at 12:10 PM on August 21, 2022
I wrote a PHP app hosted on my Linux file server that supports Accounts (obvious) and Funds (you make up as many as you want) and then there is a "View" of Funds within Accounts, and another "View" of Funds regardless of Account. There is also an Account Tran. History and a Fund Tran. History. You can earmark money deposited to or withdrawn from an account to/from one or more Funds. We use this not only for savings but also for setting aside money for quarterly tax payments, semi-annual auto insurance, annual home owners and dental, etc.
I would make the app available for the world except dealing with money I wouldn't want to be exposed to the liability. I just figured I'd tell you what we're doing and that it's working great for many funds and 2 cloud and 2 brick and mortar savings accounts.
With regard to your rant, I don't know why Banks don't offer this exact kind of thing. If I can do it (granted I'm a programmer but Banks do have a lot of programmers) in my spare time I think they could pull it off if they put their thinking caps on.
posted by forthright at 3:32 PM on August 21, 2022
I would make the app available for the world except dealing with money I wouldn't want to be exposed to the liability. I just figured I'd tell you what we're doing and that it's working great for many funds and 2 cloud and 2 brick and mortar savings accounts.
With regard to your rant, I don't know why Banks don't offer this exact kind of thing. If I can do it (granted I'm a programmer but Banks do have a lot of programmers) in my spare time I think they could pull it off if they put their thinking caps on.
posted by forthright at 3:32 PM on August 21, 2022
I don't know what country you're in. In the UK I bank with Monzo and they let you create "pots" each with a name and a picture, which I guess are like sub accounts. You can automate payments in/out of them, and transfer money between them all easily.
posted by fabius at 5:21 AM on August 23, 2022
posted by fabius at 5:21 AM on August 23, 2022
Nthing YNAB. Exactly what you're describing and it's been a lifechanging development for me and my wife.
posted by soonertbone at 11:54 AM on August 26, 2022
posted by soonertbone at 11:54 AM on August 26, 2022
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You may be able to open up multiple savings accounts with your own bank; if not, try one of the online banks. Many of them let you transfer money into your regular bank account - maybe with a couple days' delay - and that can help with keeping things "separate".
posted by EmpressCallipygos at 6:55 AM on August 21, 2022