How I Built My Household Expense Account

In today's vacillating, unstable economy, our first reaction to the free falling market may be to throw up our hands in despair, wondering if we can ever save money for small, unexpected financial expenses. The answer: yes, you can! I will share a method that is used in our household to save "house money" for those little expenses that take a bite out of the family budget, effectively throwing it out of commission!

By my personal definition, "house money" is defined as funds that are saved to use at a future time to pay for unexpected household expenses. I was introduced to this concept by my thrifty grandmother who always had a few dollars stashed away to help family members in need. She was never without funds and it was remarkable because she had no income other than her monthly social security check and monetary gifts received for special occasions, holidays, birthday, etc. She had no annuities, IRA plans or any other such retirement plans. Though she is no longer with us, she left a lasting impression upon me to always have a contingency fund for your household expenses. As I grew older, I developed a variation of her savings plan and began paying myself through savings achieved from coupons, store sales, monetary gifts and earnings.

The Savings Plan
Pay yourself by keeping all receipts from all shopping trips for whatever items you purchase. No receipt is exempt! When you save "cents off" by using a coupon, actually put that amount of money in your "house money" bank. If you saved money on a fabulous bargain sale, deposit that amount in your bank. The bank can be as simple as a milk container, a tin box or whatever receptacle you choose. The idea is to fill it. If you saved only a few cents, don't scoff at the savings, put that money into your savings receptacle. No amount is too small to save. If the savings is more than I can put away at that particular time, I simply file the receipt and regard it as an I.O. U. to be paid as a debt would be paid. At some future time when I have the money, I pay off the I.O.U. I continue this procedure until all of my I.O.U's are paid. It is empowering to see the pile of I.O.U's diminish as I pay the owed money to the "house money" bank. Some of the receipts that show a few dollars in savings are easily paid but when the savings amount to double digits, I may not be able to put that money aside until a later date. However, the important thing is to be consistent in putting away the savings.

Savings Goal
Using this savings method, you are free to set your own savings goal without feeling pressured. You are in total control. We have been able to save nearly $300 in a short period of time just by actually putting away savings from our various shopping trips. I have set a goal of having a minimum balance of $500 and anything over that amount would be considered discretionary funds. Of course, if I need to dip into the $500, I will do so. I would merely write myself an I.O. U. to replace the money. Using this method keeps me accountable and seriously motivated to replenish the disbursed funds. The advantage of this plan is you determine how much or how often you can save. Again, my objective is to be consistent and save habitually. Once you achieve a certain sum of money, you will probably want to deposit the money in your bank or credit union to avoid having large sums of money in your home.

Sources of payment for the Savings Plan
Though I am retired, I can add to my savings plan though retirement funds, birthday and holiday gifts as well as any money earned writing for Associated Content! Do not overlook dividend or interest earnings as a source of money to be saved for your "house money". I once won $30 in a contest which I promptly placed in my "house money" bank. If you have a part time job you may decide to allocate a portion of earnings to building up your "house money" fund.

Benefits of my Savings Plan
Having a consistent savings plan has offered me a measure of relief and feeling of control over my finances. It reduces mental stress about not having any extra money to fund unexpected household expenses. The psychological uplift results from knowing that we can tap a reserve fund if necessary which is an empowering feeling in this economy. The method that I adapted from my grandmother's thrifty habits is painless and effective. As I meticulously keep track of our savings from all of our shopping trips, I feel a sense of accomplishment that I truly am realizing the actual savings that we attained on those shopping trips. I owe a debt of gratitude to my grandmother for instilling in me how to save for a "rainy" day. The economy withstanding, I can now more confidently withstand the tumultuous, stomach flipping changes in the financial world.

I encourage you to begin a savings plan to establish your "house money" fund. It's fun, painless and you reap the benefits! You can adapt this method to suit your particular household's needs. You determine if you want to save your funds daily, weekly or monthly. Whatever method you select, stay consistent and your savings will mount with little effort. This technique has been a definite asset to our family in meeting unexpected household expenses. My "house money" fund will come to our rescue!