Tuesday, February 13, 2007


That is how much money I have in my savings account right now-- the lowest it's been in as long as I can remember. Of course this is just my everyday savings account-- my paycheck is deposited here, and I transfer money from this account to my checking account to pay bills, and move money from it to other savings accounts when I think there is enough of a cushion. I recently set up an automatic transfer of $225 a month from this account to my E*Trade Money Market account, which earns more interest. That $225 is what I would like to force myself to save every month, but lately, with all the money I've been spending on my apartment, I'm actually not saving any money.
I have about $17,400 in the E*Trade account. That is my only other liquid cash, but it's enough to live on for a few months if needed. I recently moved $4,000 out of that account to make my 2006 Roth IRA contribution. I don't think of any particular part of my savings as an "Emergency Fund." Perhaps I should, but my view is that in a true emergency, you just do what you have to do. I do like keeping enough cash around to tide me over for a while, but if I were really desperate, I'd sell some mutual funds, or at worst, cash in a CD or dip into my retirement funds a little.
I feel very fortunate to have these options, but it's still a funny feeling to see a 3-figure balance in that savings account. In a few days, I'll get paid, but a good chunk of that paycheck will go to my mortgage. The next paycheck after that will give me a little more breathing room, but soon after that I'll have another credit card bill due, and if I've managed to buy a bed by then, I'll be temporarily wiped out again, and will have to transfer some savings back from my E*Trade stash. I'll probably have a hard time catching up until I get my bonus sometime in late March or early April.
It's been a long time since I lived paycheck-to-paycheck-- when I did, I got through it by running up a couple thousand dollars in credit card debt, which I was able to pay off quickly by moving back in with my parents for a year or so. Even then, I was lucky enough to have another sort of safety net. I'm not really living paycheck-to-paycheck now, but trying to pretend I am is a good way to give myself a reality check about how much money I'm spending.


Boston Gal said...

I know I have mentioned this before, but I found it to be true. It takes two years to adjust (or recover) from purchasing a home.

Initially you have to adjust to the higher monthly outflow (mortgage, taxes, insurance) and the "settling in costs" - furniture, curtains, rugs, etc.

Your spending adjusts to the new costs and before you know it you are back to saving full steam again!

change is a good thing said...

Great post! I have 2 different savings accounts, neither of which I think of as "emergency" savings either, but one I have quicker access to than the other. I too also try to keep myself thinking that I am living paycheck to paycheck even though I'm really not. I think it keeps me from overspending. :)

Anonymous said...

So lucky to have other saving accounts...it's too late for me since i currently don't have a job..i promised myself i will clean up my debt and save alot more...this is a reality check living paycheck to paycheck!

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