How do you save money properly with so much going in different dirrections?

I just bought a house and thankfully spend less than I make. However, with Insurances, Gas prices, and wanting to still invest, whats the best way to save? I had opened up one savings account for a Christmas club savings, and wonder is it smart to open up other accounts and earmark them for whatever I may need........i.e property taxes,car insurance, vacation fund, etc. so that I won't spend the money on other things? What are some other strategies?|||use excel to chart your expenses on a month to month basis. at that point, you'll know how much to allocate towards bills and how much is left over. once you have a consistent idea of the latter, you should set up an automatic deposit program, i.e. ING Direct offers such a service. you essentially send money there, specifying a frequency. don't apply for too many accounts. that's going to hurt your credit.|||It was 22 years ago that I decided to open a DRIP Plan. I did this because I could not stop myself from spending money. So, I began investing it into my DRIP. I am so thankful i did.





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Best of Luck|||I'm in the same boat, but I've never worried about having separate accounts for everything. I do my banking in a particular way.





I have an everyday use account, a 'savings' account (for emergencies) a visa debit card that I only put money on when I know I'll need it for phone and internet payments, which is pretty rare, and a homeloan at a different bank. If I opened several more accounts, I would get charged more fees, so I keep my banking pretty simple. It all depends, of course, on the fee schedule of your bank. If they charge a monthly account keeping fee, that could be expensive, whereas if they charge per transaction, you might be able to control some of that expense.





I wouldn't worry about a Christmas Club account. The interest isn't crash hot, and it ties your money up for most of the year, when you could need it in an emergency. Say you need a new car engine, or hot water service in a hurry -- you want that money immediately, with NO PENALTIES FOR WITHDRAWAL.





I would investigate whether your loan has a redraw facility or an offset account. These are good features that allow you to park savings in your homeloan or offset account, where they reduce the interest (each dollar kept there saves you whatever the interest rate is on your loan, on that dollar, thus reducing your overall interest charge per month) and in this instance would offer you a far better return than a savings account that would pay pretty poor interest, which would be a taxable income, and reduced even further. I'll demonstrate.





Say you borrow $100 000. You park $10000 in the offset account or redraw facility. Now, if you've borrowed at 6%, that extra $10K is reducing your overall yearly charge for interest from $6000 a year to $5400, or a saving of $50 a month. If you have an emergency, you can access that money quickly, but while you're not using it, it's helping you get ahead of your homeloan.





I suggest you set up (if you have not already) ONE savings account. Shop around, even at other banks, and get a good one with decent interest. A passbook account is usually good, because it is hard to access (preventing you from blowing it all when you're out at the pub or making impulse purchases, if you're that way inclined) and have your employer put at least 10% of your after tax pay into that account on pay day, and the rest of your pay into your normal account.





Doing it this way saves fees because the employer pays the transaction costs, not you. It also means you don't see the money, so you get used to living without it.





Work out what the yearly cost is for your taxes, insurance, vacation fund (if you can justify it) etc, and add a few thousand just in case you need emergency dental treatment, or you have to pay vet bills or need car repairs. This should be a few thousand dollars at least. Have an 'upper limit' in your mind, and when your account gets to that upper limit (say $5000) go in and transfer everything above $5K into your homeloan.





I would put vacation fund last as an expense, but still include it. That way, if you do have a huge blowout, you can access that money too. Perhaps you could find an account that penalises you if you withdraw money too many times during the month. That would inhibit your spending, and make you less inclined to spend your savings.





Keeping it in the same account maximises the interest you'll earn, because a lot of accounts vary the interest at certain balances, to encourage you to keep a few thousand in the account. This takes advantage of this.





It is not worth keeping more than what you actually need in the savings account, if you can put extra into your loan. That money could be saving you money on your homeloan. Considering home loan rates are always higher than savings account rates, it wouldn't make sense to sell yourself short like that.





You can do most of this by direct debit, which means if you forget, it still gets done. I do both, with the redraw facility on the homeloan, and the emergency fund, but that's just because I like the convenience of being able to access my emergency savings at a particular bank (our homeloan is with another bank, with inconvenient hours). I only ever have a few thousand in the emergency account, because in an emergency, I'd only need that money to tide me over until I accessed the redraw.





Best wishes