Hi, I'm Deidre. In my posts, I talk about my voyage down the road of self-employment as a website copywriter, my achievements and roadblocks along the way, and what I’m learning as I go (with Marketing Mentor as my guide).
I love compartments. I love baskets and defined spaces where things belong. I like when things have a home. If my husband’s sunglasses are hanging out on the kitchen table, I simply bring them back to their home: the sunglass basket by the door.
That’s why I really love this new simple way of dealing with money that I learned at CFC. It compartmentalizes money. At the session given by Joseph D’Agnese and Denise Kiernan, authors of The Money Book, they suggested (in my own words):
Every time you get a check, put certain percentages in (at least) the “Holy Trinity” of accounts: taxes, retirement and emergency. You can also have accounts for paying debt, going on vacation, buying your dream home, etc… These accounts should all be online, somewhere like ING Direct, where the money is less available and takes a few days to access. (No ATM access!)
I love this idea. And I started putting 5% of each check into these accounts. (They suggested starting as low as 3% and increasing percentages as you get more comfortable to 10% and up.) Everything leftover can stay inside my checking account (accessible by debit card) and can be used for bills, spending, groceries, entertainment, etc…
It just feels good to start building savings before the money flies out the window. And 5% is small enough that for me, it’s doable.
Another tip: They suggested nicknaming your accounts something compelling. So, instead of “travel,” call it “margaritas in the sunshine.” Instead of “new car,” make it “vroom-vroom with the top down.” Instead of “retirement,” call it, “caviar at 65.” Feel-good names make it more exciting to save for these endeavors.
Thanks to Joseph and Denise for sharing the compartmental approach to money. Now, in addition to my sunglasses, keys and makeup, my money has a home too!
The notes are available from their CFC session through Tuesday. (See Goodies from CFC Speakers.)
Have you used this approach? Are you going to try it?