The one way savings account

January 3, 2012 · 31 comments

On November 30th, 2010 Girl Ninja and I had exactly $2,824.65 in our savings account (this does not include our Emergency Fund). Between November 2010 and September 2011, this account became very hungry and ate just about every dollar of discretionary income we had. By Sept. 2011, only ten months later, our savings had increased from less than $3,000 to an astonishing $45,017.92.

Our savings account was, and for the most part still is, a one way account. Money goes in, but it doesn’t go out. This is both good and bad. Good because we’ve been able to stock pile a lot of cash over the last twelve months. Bad because cash in and of itself is worthless, its value is only realized when utilized to purchase a good or service.

I leave this Friday for a six-week work trip to Korea. Whenever I go abroad for work, I have the potential to make some serious extra money. This trip should net me about $4,000 in addition to my standard base salary.

Every other time I have traveled (this is my third international trip), I’ve thrown the extra cash I’ve made in to our savings account and called it a day. Doesn’t that just scream….

This time, things are different. I know myself too well. If Girl Ninja let me put that $4,000 in to our “extra” savings fund, I wouldn’t want to ever take it out. I’m obsessed with watching the value of that savings account rise, and I seriously might suffer a mild heart attack (or have at least have really bad gas) if I saw the balance decrease.

So how do we reconcile this silly predicament?

It’s quite easy actually. I’ve created a new savings account with ING and labeled it the “New To Us Car Fund”. As you know, the wife and I plan to sell one of our two vehicles on Craigslist in the coming months (or years) and use the cash from the sale to purchase a gently used SUV from a private party. Since neither of our vehicles will fully cover the cost of a decent SUV, we will have to front the cash to cover the difference. Car loans are definitely not sexy.

If I put the $4,000 I make in to our extra savings fund, there is no way I’d be willing to pull the money out for an SUV. It would be too emotionally difficult for me. I’d feel like we were taking a step backward. The New Car Fund, however, is not a savings account. Instead it’s a spending account that I know we will tap in the near future.

I feel like a crazy person for even blogging about this. I don’t know why I can’t just suck it up and throw the $4K in our normal savings account, leaving a mental note that at some point down the road we will pull that same $4K out. My brain just doesn’t work that way I guess.

Maybe one day I’ll be financially mature enough to keep all of our savings in one main account, but today is definitely not that day.

Do you have a hard time spending money that’s in your savings account? Do you keep separate savings accounts (like I do) so that you don’t feel guilty about tapping your funds?

1 Terri

I can’t keep a single savings account. I have sub-savings accounts for quarterly income taxes, irregular expenses (put aside a fixed amount per month to cover annual bills like property taxes and car insurance), emergency fund (not touched unless I am between jobs, in which case I will draw a fixed monthly amount less whatever side income I make that month), and a planned spending account that is for things that I plan to spend money on, like vacations or major purchases.

2 StackingCash

These past six months we have spent what we make on home improvements. I feel like I’m hemorrhaging money because our savings account has stayed the same. We are so conditioned to hoard money after those rough years we had after 9/11/2001. I actually am dreading how I would feel if our cash savings went down because we are not making enough money to satisfy our “lifestyle inflation.” If I had set up specific goals I don’t think I would have the anxiety I have today. Good job setting that goal. Hopefully my wife and I can set up some goals to ease my anxiety.

3 alana

dont worry, you’re not crazy, I feel you. I’m right now contemplating opening a new account just to hold my cash savings extras from last year. It’s not that much and i have a few ideas of what i want to do with it but I haven’t quite decided. Since all my other accounts have a function , I dont want to mix up my extras from last year with those cause like you said, i know I’ll never want to spend it then. Decisions, decisions but apart from sticking it in my mattress, i probably will open a new account as I just like the thought of having a zero starting point in my “cash savings” account so I can track each deposit for 2012 and hopefully have the balance at the end of this year reflect my savings projections.

4 slug | sunkcostsareirrelevant.com

Glad you changed your mind on sub-accounts. It’s definitely a better method.

5 AMD @ amomsdime

I absolutely keep sub accounts in ING-without them I would have too hard a time tracking specifically how much I am saving for each goal (how would I divvy up the interest accumulated? :) ). Mentally I just like to have everything slotted into it’s own space and then I don’t feel guilty when I pull the money out for it’s own goal.

It sounds like from this post you may have a bit of a breakdown when you pull out your savings for a down payment!

6 Mysti

I have multiple ING accounts. They each have their own purpose. At a glance, I can see what I have to spend (or save) and on what. Yeah, I know it is all the same money, but I love my little piles.

7 Bethany

I think keeping seperate accounts is really smart! Once you get over the initial heart/stonach/brain ache of taking out the first $4000 for a car, it would just get easier and easier to take out more for other things you ‘need’. Having one account that never gets touched is a really good idea, in my opinion!

I currently have two checking accounts (one for regualr expenses, one for paying of debts) and three savings accounts (emergency fund, house fund, vacation fund). You have to do whatever works for you!!!

8 Mo D.

Right now, we have 3 accounts with our bank; household chequing, household savings, and a US account for our once or twice a year trip(s) south of the border. Household chequing is obviously our main account, but just prior to selling our condo this year, we will open a proper “Emergency House Fund” for all the big-ticket stuff that could need repairing/replacing when we purchase a townhouse. Ideally, we’re hoping to buy a home with Central Air/Furnace/Water Heater that won’t need servicing/replacing for a lot of years, but you never know.

More and more, I like the idea of a sub-account or two; at a glance way to see how close you are to a goal.

9 Brian

We have seperate accounts for different goals. It works well for us. I have a few extra accounts I need to conslidate in order to cut the number of banks/credit unions I am customer at. But overall this working, mostly because my old lady is a save for a goal type of gal.

10 Mike

I know the feeling. I use PNC and they allow me to earmark money in my savings account. I currently have 6 earmarks. Some are for long-term things like the emergency fund, but others are for short-term items like money my parents gave me for my birthday that I haven’t decided how/if I’m going to spend it. I also put money aside there to save for summer camp for my kids (about 5-6 years off from now) that will be put into I-bonds when I reach an amount I deem enough.

I like this approach because they all accumulate interest in the same account that I actually apply only to my emergency fund (it isn’t quite where I want it yet) – just as a way to build it up faster.

11 Honey

I also use the ING subaccounts, and my emergency fund one has never decreased, I just couldn’t do it. Though I do keep the balance steady, and every time I get the monthly payout (of $2 or whatever lame amount it currently is with interest rates so low) I transfer it into my wedding fund subaccount.

12 Larry

I have one checking account, one savings account, and my retirement Roth and traditional IRAs. As long as I track my saving and spending, I don’t feel any need to complicate things with further accounts.

13 Kyle

I definitely have to have different savings accounts for different purposes. Unless I can see my money growing towards each of my goals, I tend to just save it. ING helps so much!

14 asgreen

I’d say both. I refuse to touch the money in any joint accounts I have with my husband. However, I’m much more willing to take from my personal savings account. My DH and I just started our second joint savings account for an emergency fund. So now we have our mortgage or big purchase savings account and an e-fund. Both of which I will never touch!

15 Jessie's Money

I have several sub savings accounts as well and some are planned saving – makes sense to me.

16 Matt

I definitely want to create a new car fund…I know that my wife’s car is going to go out in the next three years or so, so having $15,000 in the bank would be nice to be able to put towards that.

17 Ashley @ Money Talks

I’m the exact same way. I have to have separate savings accounts for everything. I can’t take money out of our “regular” savings account either. That’s for when I’m starving to death or living in my car or something.

18 Hannah

I’ve been reading your blog for quite some time now, but haven’t commented. I grew up in San Diego since the 3rd grade. Just wanted to let you know you’ve been an inspiration.

I should be free and clear of debt this June 2012, after 15 months and paying off $25k. I’ll be 26 years old. I’m hoping I can get to where you’re at in terms of savings in a few years.

So my questions is, would you sue me if I created a blog called “Punch Debt in the Ovaries?” :P

19 Ninja

Yes, I love when people lose their commenting virginity. Comments are the only way I can tell if people love or hate what I am writing about. Feedback is always appreciated.

Pumped for you to punch debt in the testicles and live the life of debt freedom. It’s pretty freakin’ epic.

And no I wont sue you, the blog name is too funny :)

20 Larry

punch debt in the testicles

I’d say “Punch Debt in the Balls” has more of a ring.

21 Hannah

I was hoping you’d catch the Ron Burgundy/Anchorman reference!

22 kim

You’re not alone – my husband earned extra money that we specifically earmarked for travel and stashed it in savings until needed. He had to pry it out of me to actually use it. Unless moving it to another savings-related account like an IRA, it hurts me too much.

23 Amanda

We have an emergency fund and our emergency fund has an emergency fund. The big account is a T Rowe Price prime reserve account. The little one is a savings account attached to my checking account. We also have a seperate ING account where we are putting away extra money for Auto Replacement.

The main EF is for the really bad stuff: job loss, roof caving in, a/c going out in the middle of the summer. It is “fully funded” but we keep adding a small amount to it monthly.

The little EF is for things that we know are going to happen, but not when. For example, new tires, that sort of thing.

24 The Happy Homeowner

I’m the same way–it literally pains me to take any money out of my savings account, so I don’t unless there’s no other option! Most of the time, I end up taking on more work/side gigs to bring in whatever extra I need in the given month’s cash flow. It gets pretty crazy when I decide to plunk down $2K to take my Grandma to Ireland (her dream trip; I’m taking her for a retirement present) :)

25 krantcents

i have been a saver all my life and keep a low profile lifestyle. I will retire in 5.5 years (second time) and will have to spend which will be a big change.

26 C

Ugh, what I wouldn’t give for that kind of money. Fuck.

27 Lindy Mint

I’m a dorky minimalist who likes to only have two savings acounts. One we don’t touch, and the other is fluid for small emergencies, like when the Playstation dies right before Christmas.

We had to pull money out of our untouchable account to refinance our house a few years ago. I literally cried, but I’m a girl, so I have an excuse.

28 Kate Kashman

I find separate accounts easier for me, both administratively and emotionally. I have done the Mary Hunt multiple-subaccounts within one main account system, and I was spending hours each week. (I was also more financially organized than I have ever been, before or after.) At the moment, we utilize our main household account, a rental property account, a rent and utilities account (our utility bills come on a random and infrequent schedule, so must set money aside for that 2,000Euro gas bill when it comes in a year) and our money market savings account. Oh, and our internet shopping and Christmas account, which is tied to a particular credit card (USAA rocks!)

Unfortunately, our money market includes both our emergency fund and also our moving back to America funds, which will need to cover purchasing a car and setting up whatever housing situation we choose, either for down payment, appliances, repairs, etc. I’d like to move the emergency money to the side but I hate to set up another account, plus then I would have to admit that our well-funded emergency fund isn’t actually well-funded at all. It just looks like it because it has all that extra cash stashed in there.

Obviously, you are not crazy.

29 Lea

We have many savings accounts – emergency fund, vacation fund, car fund (inititally to go towards a new to us car, but as we jus bought a car in October, it now goes to unexpected car repairs, annual insurance and license renewals), and one for a house down payment. We also have another savings account for misc. savings (new furniture, upgrading items, computers, etc.).

To me it’s the easiest way of knowing what goes where. The banks can do the work, rather than me having to keep track of it on paper or spreadsheet.

30 Melissa

If you’re crazy, at least you’re in good company. I too have many sub-accounts and can’t bear the thought of taking money from any of them – even when the time has come to spend the money for its intended purpose.

31 Gina

I have the following ING subaccounts:
Vacation
Christmas
Home Repairs
Car Repairs
Pets
Property Taxes
Gift/Charity
Hobby
I find it sooo much easier to save this way, and like you stated there is the emotional attachment to seeing the money in the little account and NOT wanting to take it o. u. t.

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