I have never been a saver by choice, whenever I was saving it was because I set up a scenario to force myself to save. When I saw money in my account, I saw it as under-utilized dollars. I always felt like money should be invested, spent or paying off debt. That led me to always have super lean and optimized budgets. Those optimized budgets always led me to a few things:
- Last minute scrambles to pull money from other places to cover unexpected expenses.
- Creative days where I had to figure out how to manage till my paycheck came.
- Spending on unnecessary purchases when I had windfalls.
- Creating small zombie debt that I would pay off only for it to reappear a few months later.
For years I had 2-5 accounts for various combinations of things to help budget or save. Sometimes I was overly simple with a single account to do everything and other times I was way too detailed and had single use accounts like having an account strictly for gas or for another only for eating out. The latest change to my accounts, however, has changed my mindset towards savings and added a missing link I had needed in the past. That missing link was the Irregular/Unplanned Spending (my multi-verse) account.
Outside of re-occurring monthly bills and day to day consumer spending was this odd set of expenses that were not frequent enough to be considered monthly but consistent enough to be planned for so not really consumer spending. I started making a list of all those expenses that were quarterly/annual to see how much per paycheck I would need to fully cover that amount. But the over optimizer in me wanted to account for every scenario so I started throwing seasonal consumer spending like annual school supplies, birthday presents and travel. Finally, I thew the randomness in there of things I used to use the emergency fund for (but were not real emergencies) like car/home maintenance or getting 5% off for paying some services annually instead of monthly.
After gathering all the scenarios and getting a total for the year, I found out how much I needed per paycheck and started re-allocate from the other accounts to get enough to fund a savings account with the goal of transferring funds over whenever one of these hypothetical scenarios I budgeted for kicked off. For the first couple of months, I was always draining it because it seemed like every time something kicked off, the account barely had enough to cover the expense. After some time, I realized a few benefits:
- The account started causing unplanned savings when one of my planned scenarios didn’t happen.
- The interest payments from the savings account grew the less I withdrew. Which incentivized me only transfer out when truly necessary.
- Windfalls transitioned from random purchases to now becoming buffers from having to transfer funds out from the savings account.
My account that tried to factor in every scenario in my universe ended off showing me the need and benefit of saving for possible future unplanned scenarios and kicked off my mentality change from just in time spending to just in case saving.
It is still hard sometimes to not let old habits kick in but for now focusing on little things like how much interest the account is making month to month keeps me tethered to the overall goal of saving more and spending on more needs than wants for now.