Not too long ago I read a book called The Millionaire Next Door. It really struck home with a number of chords, and among the many lessons learned, one was to constantly monitor your budget and track where every penny goes. Outflow is equally, if not more so, important than inflow. There was also mention of something called a budget calendar, which wasn’t something I ever had before, but whose concept intrigued me. Sure, I’ve long had a monthly budget, that generic spreadsheet that outlines and estimates bills and expenses, but never before last weekend did I really take the time to develop a predictive calendar based on standard inflows and outflows.
The thing that’s nice about my new budget calendar is that it doesn’t contain any of the clutter from Quicken; it’s only the accounts that Jen and I use for spending on bills, mortgage, gas, groceries, etc. It allows us to look ahead to any point this month or all of 2005 and see how much money we would have without any of the variable expenses. That’s right — it deliberately only includes forward-looking fixed expenses (utilities, TV, mortgage, insurance) and not the variable expenses so that we can better control outflows.
With this project also came the realization that we haven’t really been very good about using the money market account linked to our checking account for its intended purpose: savings and emergency fund (it’s been more of a fall-back checking account and an excuse to make purchases that we don’t necessarily need to make). So I hit The Fool and started to see a trend: Everyone had an e-fund with ING Direct. And now we do, too.
What’s nice about the ING Orange Savings account is that it’s not really a bank account or even a money market account in the traditional sense. It’s linked to up to three of your checking accounts, so you electronically transfer money in and out. Many Fools use it as a way to move money between accounts without the need for the post office or leaving the comfort of home. I plan to do the same.
But here’s the key: 2.25% interest rate (far better than just about any savings or money market account out there). And it’s an account that’s truly separate from your active checking account (except for the electronic link, of course). You can even create ING Direct “sub-accounts” to separate your funds for various purposes (e-fund, travel fund, home repair fund, etc.), which I think is great.
So, if you’ve read this far, now you get to reap the benefits if you open your own ING Orange Savings account: $50 free. And that’s with only a $1 minimum initial deposit, no monthly fees, no catch. Just use this link to open your account. The only incentive I have in sharing this link is knowing that I’m doing my part in spreading financial freedom and encouraging savings over spending. (There is a referral program, but you’d have to contact me directly for that, and you’d only get $25 while I’d get $10, so I won’t be offended if you opt for the $50 sign-up bonus. That’s what I did.)
Happy holidays! Don’t buy into the commercialism of the season. Save often and spend sparingly. Your future self will thank you.
Update (1.13.2005): The above link to get the $50 from ING appears to have been shut down. But you can still get $25 free if you contact me with your first name, last name, and email address (I can refer you).