Sorry I seemed to drop of the face of the earth the last couple days, but I’ve quickly learned after living on an island no bigger than a Super Wal-Mart, the internet here is quite unreliable. I’m glad to be up and running today, so hopefully I will be able to post regularly. Now on to bigger and better things.
Don’t get confused by my title debt punchers, I love saving money. In fact everyone should save. I’m a huge fan of my online savings, account. Actually, that’s not completely true. I was a huge fan until Bank of America took over my Countrywide account. Once I return stateside, I plan to convert to the ING cult.
As important as I think my savings account is, I’m not gonna lie, it’s only my second most favorite way to pay for things. My all time favorite way to pay for future expenses is cash flow.
I may have money in the bank, but I hate spending it. In fact, I haven’t withdrawn one cent from my savings account in the two years I’ve had it (except for some early Roth IRA contributions). Virtually all expenses can be anticipated, and as I anticipate them, I figure out ways to use my income to afford them. This keeps me from dipping in to my savings. Take for example the digital camera, I blogged about recently. I’ve wanted it for a while and have more than enough cash in the bank to afford the purchase, but when I finally decide on the camera I want, you wont see my savings account drop a penny. Instead, I’ll set aside a couple hundred dollars over two or so months of paychecks until I reach the purchase amount. Then, I roll up to the Best Buy like a true gangsta and say “Give me my camera…please.”
There are a couple benefits to using the cash-flow system for small to medium expenses. First, your savings account is truly a savings account (not some quasi-savings/quasi-spending thingy). Second, it limits buyers remorse and impulse buying. If I set up a cash-flow system, then I am forced to wait on the purchase at least until my next paycheck. Lastly, it makes you sound really cool when people ask if you want to finance your purchase and you say “Hell no, I’m cash flowin’ this biotch.”
Do you all work the cash flow system in to your medium sized purchases? Do you regularly dip in to your savings account, for non-emergency items? Did you miss me these last four days? Lord knows, I barely survived without you all.