Earlier this week I wrote about Mary Hunt’s notion of a Freedom Account, a second checking account for handling irregular expenses. This isn’t really an emergency fund, but a separate account to keep things like insurance bills from thwarting your finances.
VH at Funny About Money posted a response describing how she uses targeted accounts for the same purpose. “When savings for specific purposes are collected in separate accounts, to tell how much you have for a given need,” she writes, “all you have to do is look at the bottom line. To my mind that’s a lot easier than trying to keep track of a bunch of separate theoretical subtotals in a spreadsheet.”
In a similar vein, Jim at Blueprint for Financial Prosperity recently wrote about what he calls an opportunity fund, an account with “a cash reserve on standby in case you see in opportunity that you don’t want to miss”. I think this is an interesting concept, and something I might try to implement.
While I like the idea of having different accounts for different purposes, I do worry about going too far. One of my goals is to simplify my life. Multiple accounts make it more complicated. After a certain point, it seems to make sense to have just one giant savings account with all my money.
Finally, long-time reader icup sent me a series of articles from his local newspaper, The Centre Daily Times. “Paycheck to Paycheck” looks at how regular folks deal with financial stress. So far six parts have been published:
- Under the surface of prosperity — “Judy Corman once had a steady paycheck and a home. Then both disappeared, and she joined the ranks of Centre County residents struggling to support themselves.”
- Stretch every dollar — “Statistically, Todd and Heather Kellerman shouldn’t be making ends meet. But they’re getting by.”
- Course in life lessons — “Eli and Elizabeth Halterman straddle two worlds, and the reason just learned to walk.”
- Fighting debt’s grip — “Before Jeff Snyder took the second job, he said, he would cry himself to sleep at night worrying about which bill he was going to pay and which ones he wouldn’t be able to.”
- Hard work pays off — “Rose Fritts said she would have needed a camera to capture the expression on her husband’s face when they walked through the home that was about to become theirs.”
- Bills or pills — “It’s a routine scene: A doctor counsels a patient in an office during a checkup. Jackie Christiansen takes none of it for granted.
I love to hear how real people cope with everyday personal finance. It’s so much more interesting to me than the theoretical best-case scenarios provided in books and magazines. (There’s even an entire blog carnival devoted to money stories. I should visit it more often.)
This article is about Spare Change