I don’t know about you. But I do have 2 bank accounts.
One is known as an “operating account” where my salary gets paid into as well as all my expenditures are taken from. Here is the list of transactions are made with this account:
Income:
- Salary
Expenditure:
- Bills payment
- Loan installment
- Insurance premium
- Cash withdrawal
- Share payment
- Petrol costs
- Donations
The other account is truly a “savings account” where I divert a portion of my salary to this account almost immediately when my salary is paid. I keep the ATM card out of reach so that I do not touch the money inside this account. I do not have checks or other withdrawing facilities tied to this account. No bill payment or insurance premium are made from it. It is important to make the account as inaccessible as possible so that your money is “safe”. I will only use the money for emergency situations.
This is what you should do:
- Set up a new savings account with minimum banking facilities
- Divert a portion of your salary into this account the moment you get paid
- Leave the ATM card at home or leave it with your spouse (without him/her knowing your password of course!)
- Once you have saved sufficient emergency fund, continue to put money into this account
- Invest when you have thousands of dollars more than your emergency fund level
- Repeatedly save and invest
Understanding the purpose alone is insufficient, you need to take action. Open an account today and tell us that you have done so.
For those who has an additional account already, save now and tell us you have done so.
I will give you a pat on your back. Trust me, you will feel good about yourself.
You may also like:
- How to save money?
- Automatic Millionaire by David Bach
- Supplementary Retirement Scheme
- Now, you can be the bank!
- 10 Things You Need to Know About CPF Life
- Fail-Safe Investing by Harry Browne
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