save 3 months salary

As soon as I finish this entry, I am going to build a 0 based cash budget. I hope to determine a realistic monthly goal and mark my calendar for when I can hope to see each 10% of the goal as it accumulates.

Economy is too unstable for me to live paycheck to paycheck!

As soon as I get my tax refund, I’ll be just over halfway there to achieving this goal!

Seems like this process has been a whole two steps forward, one step back sort of deal, where I get some money put aside but then I dip into it for one thing or another. Most recently, I took a vacation. But it was my first vacation in five years, so I can’t really feel bad about it. (Actually I feel pretty good about it. It was great! :) But I’ll continue saving up for this and I hope to have at least like 6500 if not more by the end of this year.

Well, contrary to my previous entry here, I will not be at $6k by the end of the year through my ordinary monthly contributions—only about $4k. Long story short is I spent my tax refund, buying a new computer for my grandmother and also moving into a new apartment. Oh well. Both of those things seem worth it. :)

So, with my anticipated tax refund (which I did not really expect! I had no idea my W4 was that out of whack with my deductions) and the amount that I’m saving each month, plus what I already have in savings, I hope to be at the $6k mark by the end of the year (assuming I don’t wind up moving into a new apartment or have any unexpected expenses). So that will put me at nearly 2/3 of my goal by the end of the year.

Opened it yesterday! I now have an honest-to-god passbook account, complete with tiny little cardstock folder in a plastic holder to get stamped when I come in to make deposits. I can just transfer cash from checking with online banking, but the passbook is kind of fun. :)

Yesterday I worked some more on my 2008 budget. I know I forgot some periodic expenses, like when I’ll have to kennel my cat at the vet’s because I’m going out of town, but I put all the excess in the “to savings account” category. So I have a plan to work on this goal.

My first step to accomplishing this goal will be to open a savings account with my bank. I plan to take care of that this morning.

I also need to figure out what dollar amount I mean by “three months’ salary” in order to mark this done. I don’t literally mean “six exact paychecks.” I think I’m just going to say $10k. That would pay three months’ worth of rent and bills, plus extra left over for, like, groceries and cat food. I think it’ll take me well into 2009 to accomplish this goal, especially since I hope to take a vacation abroad later in 2008, which will eat up a chunk of savings.

The name has changed through the years to become more PC: laid off; RIF (Reduction in force); Position eliminated. No matter how you say it, the results are the same – unemployed. Happened to me, but I can survive this down time because I did the impossible – I saved three months salary. That little emergency fund will be restocked once I am employed again. It was worth the pain.

I did it by dropping small things like lunch out or an extra snack, etc. Then on each payday I’d transfer any remaining funds in my checking account to my savings account, this plus the steady $100 deposit per pay period worked. The savings sweep became exciting. I found that I’d try to “up the ante” each payday, like trying to beat my own record.