When to Tap your Automatic Savings Account
March 15th, 2007 |
As soon as you join the Million Dollar Savings Club, you’ll start building up money in your automatic savings account. Lots of it. In fact, I just checked my ING Direct account and find $552.12 since the beginning of the year. That’s from saving a modest fifty bucks a week. But when should you spend some of this money?
Last week Sherry (my wife) turned on our oven. She set it for 350 degrees to bake some dinner rolls. After 15 minutes we noticed there was no heat. Doing what any good husband would do, I set it to 550. Certainly it would heat up then. No luck.
I was upset. After all the oven was only a year and half old, just out of warranty. It’s funny how that works isn’t it? In any case, I knew it needed to be fixed and that would cost money. Money I didn’t plan on spending. But how much?
Suppose I didn’t have my automatic savings account. How would I pay for it? Probably with a credit card. Then I’d have a new bill to pay each month.
Well so far the oven repair ended up costing $120. It’s still not fixed. I took the $120 out of my checking account. Why? Because even though the money is in savings, why not push yourself just a little. You never know what disaster awaits right around the corner. If the repair were $500, I’d probably take some money out of my automatic savings account to cushion the blow. But you don’t need to make a deal with devil and turn to credit cards.
So when do you tap into your Million Dollar Savings Club money? When an emergency comes up where you can’t pay cash any other way. Take out just enough to get you by. That way your savings keeps building and building. You’ll be more and more secure because you handle bigger and bigger problems. Eventually even if the roof needs repair on your house and you’ll just write a check without thinking much of it.
This week’s standings for the Million Dollar Savings Club are:
Bronze: $275
Silver: $550
Gold: $1,100
Not sure what I’m talking about? You can learn more about the Million Dollar Savings Club here.
