Saving for “Expected” Unexpected Events

The Story Behind My $500
While we’re discussing banking, I must tell you the story behind my $500.  I have $500 that’s been with me since the first job I had right out of college.  I placed this money in an account back then to see if it would double over a lifetime like old folks would say from time to time.  When they said double, at least back then, I wasn’t thinking about the amount going from 500 to 1000.  I wanted it to do a whole lot better than that.  I was fresh out of college with a high-paying job, so putting $500 aside into an account of its own wasn’t a big deal.  The funds may not be enough to change the world or start a new business, but it taught me something worth a whole lot more.

What It’s Been Through and Why I Didn’t Need it
This money has been with me through 4 jobs, 4 homes, and a 2nd marriage.  I won’t turn it loose.  It’s there just in case I need it to start over.  You see I started with these funds and for some reason now I want to end with those funds.  Why didn’t I ever need these funds?  Couldn’t I have used it?  The answer is ‘yes’.  I needed it and I could have used it in many situations.  What I learned was this, when you don’t have enough, you find ways to get what you need or desire.  So, if I treated the $500 as if it didn’t exist, I had to come up with other ways to get what I needed and that’s what I did.  This is what you too will have to do.

Giving Your Money a Name Works
You see what I learned was that when you give something, like your money, a name or plan, it changes how you deal with it.  It becomes important, untouchable and even sentimental.  It wasn’t just $500 dollars any more.  It was my $500 dollars and I plan to monitor for the rest of my life.  It give me satisfaction.  They takeaway here is to begin naming your money.   For example, may be you want to set aside funds for your child’s car for when they turn 16.  That money and where you keep it becomes not just money, but your child’s [insert name] car money.  And if you’re like me, you won’t let anyone have it.  It’s time you started using this practice to your advantage because it will work no matter what.  Give your money a plan.

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The Escape Funds
I tease my wife, Pamela, all the time about my $500.  I tell her she can have everything I have, but she can’t have my $500; I’m taking that with me.  The only person who will ever be able to touch the $500 is Tamia, our daughter.  In hindsight, I say what’s $500.  If you’re disciplined and learn to plan, $500 is nothing.  BTW – I failed to mention that my $500 is no longer $500; it’s grown significantly.  I mentioned earlier how long it’s been with me and what it’s gone through.  It might sound like this $500 is my escape fund and that wasn’t/isn’t the intent however,  you always need funds saved for a rainy day.  You never know what life might dish out at you.

Today is Friday!
There are two takeaways from this post I think are important.  One: give your money a plan and see how possible it is to save for the things you desire.  Two: you need an emergency fund, money saved for those “expected” unexpected situations that life brings.  

Question: Can you think of reasons why you need untouchable funds?  Leave a comment below or click here to email me (or tweet me).