Why I chose to use my savings account

Around three years ago, when I began working at UMassFive as a teller, I had a checking account. That was just about all I cared about. Granted, I did have my basic savings account, which everyone has, but I didn’t use it, and I didn’t care about it. Why would I? I loved the interest rate Co-op Advantage Checking gave me, and I wanted to squeeze every penny out of it.

Then, not two months into my new job, my car broke down.

The funny thing is, it wasn’t actually my car. I was twenty two, working two jobs, and just barely out of college. My mother let me use her car at all times, because she lived in New York, and it helped her not have to deal with owning a car in New York City. It also helped her convince me to run errands for her on my days off. And for me, it was a free car. My mom paid for the insurance, and I had no car payments. My responsibility started and ended with paying for gas and repairs. At the time, that was a lot, but I didn’t know how good I had it until I didn’t have it anymore.

So there I was, with no car, two jobs and about $300 to my name. It was also the winter, and I lived nowhere near the bus route. I got by for about a couple of days, but quickly realized I’d need to buy a new car. Desperate times called for desperate measures.

At 60 hours a week, with budgeting, I was making enough money to save without car payments. With car payments and insurance, I didn’t want to give up my savings, but in order to do that and make sure I was making my payments in time, I had no choice but to put money into a savings account. That, along with a loan savings account, turned a hectic heap of bills into a manageable stream. I began to appreciate that my savings account was there for me to build my savings, and that I couldn’t touch it very easily. And I began to really appreciate it when my savings account grew. It not only helped me build savings, but it also helped me pay my loans down more quickly… Happy days!

Since that time, I’ve moved to being a full time employee of the Credit Union, and I’ve begun leading workshops on budgeting. The practice what you preach mantra has helped me make a more convincing case for separating savings accounts from spending accounts. In that time, I’ve picked up a Holiday club savings account, and am considering a secondary savings account for more transparency.

Still, it’s not easy to work out an organizational plan, especially when you’re concerned with making a high rate of return on the money in your checking account. For those who are resisting a savings account, I have one suggestion: Look at how much interest you’ve earned over the last year. If you feel like you couldn’t have saved more money by keeping your savings separate from your checking, then you should keep doing what you’re doing. If not, it might be time for a change.

How about others? How has organizing your accounts differently helped you save (if at all)?