Eventful Month

by Ed

Usually, I maintain a savings account for unexpected expenses. As the savings account increase, I’ll transfer some of the money to purchase bond mutual funds or put it in fixed deposit. I won’t touch the money once it is in these 2 intruments. Whatever expenses I incur comes out of my checking account.

This month is different. Due to lower income than expected and also some big purchase (laptop computer), I have to dig into the savings account, to pay off the new laptop, bought on credit card. By the way, I paid the full amount. Some other bills, plus insurance premiums that came up forced me to use the funds in my savings account. I did not feel good about it. As a matter of fact, my Palm organizer conked out a few days ago, and would probably cost a few hundred to replace. Usually, the money would come out of my checking account.

I’m writing this to share my strategy to save money. Because I have to dig into my savings account and reduce it a fair bit, I didn’t feel like spending this month on whatever. As I’ve developed this habit, touching the savings account is a red flag for me. At this time, I stopped myself from making big item purchase until next month. This could be a strategy you can use too. Any time the amount of savings exceeds a certain amount, transfer it out, invest it but don’t spend it.

Now, if I really have to break out the bonds or fixed deposit, it really have to be an emergency or it would be to buy an investment, as in investing in a property, or shares. Whatever it is, the money would not go for a new car, new gadgets or holiday. You might have a similar strategy to save money or to stop you from spending more when you don’t have the money. This way, you won’t buy things on credit and get into debts. For your info, I contemplated buying the new laptop after several months and it wasn’t a impulsive purchase.

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