Wednesday, May 27, 2009

What works for me

I have not been writing much about frugality or my money. Gardening, which is part and parcel with self-sufficiency and frugality, has taken much of my time. My current situation has a good-paying job that looks fairly secure, a lack of consumer debt, and always spending less than I earn. I keep my strategies simple:
  • Transfer money automatically from my checking account to my savings accounts every pay period.

  • Pay my bills immediately using electronic bill pay.

  • Subtract any spending from my budget within two days.

  • Spend no more than I allocate for each spending category.

  • Contribute to my retirement accounts regularly.

  • Keep a well-funded emergency savings account (at least two months worth of spending).

My emergency savings has come in handy as one of my cats was extremely ill. With all her treatments, an emergency over a holiday, room and board for several days stay at the veterinary clinic, the costs really added up. My emergency fund was able to cover this unexpectedly large expense.

Being a homeowner is an expensive responsibility. The lone mature tree on my property has never been in good condition but looked to have some years left. A recent diagnosis left me with a shortened life span and the need to plant a new tree close by as soon as possible. My house savings account has enough money to help me fund this unexpected expense.

The bottom line is I spend less than I earn by keeping myself on track with automatic savings and a spending plan. What have you found that works for you?


  1. Like you, I have my banking set up to automatically transfer funds on pay day from my chequing to each of my various savings accounts. I get the most significant financial benefit from having separate accounts for each of my major savings groups - one for the house, one for insurance (so I can save by paying in one annual lump sum rather than monthly), an emergency account, and right now I have an extra savings account for a couple of upcoming vacations.

    Right now however, I'm not sticking to my budget at all. I've been out of work for most of this year AND the house is under renovation so the debt is rising as the income is falling. Not ideal, but not beyond repair either.

    I'm enjoying your blog a lot these days - I admire the way you live and the choices you make. Please keep writing!

  2. @Rintin,

    Thank you for your kind words about my lifestyle and my blog. I also have several savings accounts for various purposes. I find it easier to keep track of it all.

    You sound good about your situation despite the lack of job and house renovation. For your sake, I hope the low income with increasing expenses becomes greater income soon!