What you need:
- Record of Savings Worksheet
- A savings account
Time Required: Between 15-30 minutes
What is a Record of Savings?
A savings record allocates each dollar that enters a savings account, emergency account, or even your piggy bank. It is a monthly reminder that every dollar in the savings has been committed to something. When proper saving techniques are in force, all emergency and non-monthly expenses (such as car tires and repairs) can be satisfied without the need for debt. The savings accounts essentially becomes your own “credit card company”, lending money interest free under the assumption that it will promptly be repaid. The Record of Savings keeps track of several saving categories called “accounts” and their subsequent “sub account”.
Record of Savings Instructions
Although each category is labeled as an account, there normally are only two physial bank accounts. The first is the 3-6 month emergency account, and the second is the “traditional” savings account. The emergency account should not be connected to any debit cards or used as overdraft protection to any other account. It is strictly for emergencies, and keeping it independent protects it from the “I REALLY NEED A NEW ————!!!”
The Record of Savings needs little instruction on setting up. In fact, it looks and behaves similarly to the Simple Budget Worksheet. Because of this worksheet’s simplicity, the emphasis has been moved from filling it out, to smart methods of saving.
The first priority is to fill the emergency accounts, starting with the emergency $1,000 cash account. This first emergency account is typically stored in a safe place in the home, and consists of ten $100 bills. The large bills deters from a