$68 A Month
I had hoped back in November to pay off our house insurance in full and not have to pay that monthly amount. I'd discovered in my figuring that I could save a decent amount of money by paying it off early. Try as I might, I just couldn't manage it. There was no overtime to be had and no extra room for stretching dollars to reach that big goal. However, what I did save, I decided to set aside to pay the next six months of car insurance. I thought maybe I could take that small amount of savings each month and use it to pre-pay some of our sub-accounts each month.
I'd never have believed that this could work as well as it has! In paying off that car insurance early, I was able to save $68 a month. In turn that $68 a month has built exponentially into an even bigger savings of nearly $162 a month thus far and it has potential to grow into even more.
I began in November of 2016. That's when the house insurance came due. I had enough to make that big first payment which is usually equal to about 2 1/2 months of installment payments and had about 2 payments leftover. I know some will say that in paying their insurance in monthly amounts it's manageable and besides they have two months each year when no payment is due. Well it really doesn't work that way! What happens is that your first payment is equal to those two 'free' months of the year!
I paid the first big payment and what remained was about $300. I looked at what we had coming due in annual costs in December and January. That was property taxes, car tags and car insurance. I took the remainder of the money from the savings for house insurance and finished filling our sub account for taxes and car tags and put the rest towards the car insurance. In December and the first two weeks of January, I was able to take the usual monthly amounts for taxes and tags and put that with what I'd normally pay on the car insurance per month. This netted me enough 'extra' to pre-fill the car insurance fund for six months, the full amount coming due in January.
John had holiday pays in January checks which I put to good use and pre-filled our 2017 sub-accounts for property taxes and 2018 car tags. So now I'd paid our car insurance for a full six months, had tag and tax money for the end of the year in our sub-accounts and I had an extra amount of 'free' money that we could use as needed. I decided that since we had no immediate needs to continue to pre-fill other annual sub-accounts. I have routinely taken the small monthly savings from all the filled sub-accounts and each pay period I push that amount to fill other sub-accounts.
We had a third pay period in January which meant over the next 3 pay periods I had half payments that I could sock away towards sub-account balances. Those extra dollars helped pre-fill a small annual payment for life insurance, the auto club we belong to and another small medical insurance policy we carry.
In February we had a surprise reduction of the amount we thought we needed to pay to finish our carpeting in the house. That money was pushed towards a tire fund as was overtime that John worked and a month's worth of savings from filled pre-funds. I soon had our sub-account for new tires filled. For one reason and another we received a reduced price on our car tires. So here at the first of March, I again had an extra amount of money. This money was pushed to the beginnings of a vacation account.
It's really all small amounts of money that add up. Most of the sub accounts received a small payment of under $10 a month, but once filled that's almost $10 a month I can add to my monthly amount for car insurance (about $68). At present I have an extra $162 a month to pre-fund our sub-accounts. In order to give myself a good visual, I made a simple growth chart for each account and filled it in with a green ink pen to show my progress on each account. I can't tell you how the site of a filled growth chart on my paper makes me feel! It just spurs me on to make our money work harder for us by filling up the rest as quickly as I can.
Lest you think I've ignored the fact that car insurance comes due every 6 months, I haven't. This pay period, I began pre-filling that account once again. I expect to have it filled in two more pay periods.
I've told John any overtime he works will see a deposit also going into the vacation fund, and indeed his pay period I added another lump of money to that fund.
Now that I'm all caught up, once the auto insurance account is full, I expect to be filling my house insurance sub account. I'll push any overtime money that way, too. Before November I should have filled that account.
The beauty of this small savings each month is that the bank statement shows we are carrying a higher balance than we have in some years. I am keeping careful track of what is in each of our sub-accounts. Should we find ourselves in an emergency, we could readily draw on the cash in these sub-accounts. I've said before that it's due to our hard discipline this works well for us. For another, a distant savings account might work best, so that the money can't be easily used or encourage impulse spending.
It really has helped reinforce my idea that small savings add up to bigger ones. It's made me more mindful of how we utilize John's overtime hours, as well.
This was just a midnight brainstorm during one of my frugal boot camp sessions and it has been one of the best, I think. It has worked so very well and has helped me feel we've a little more wiggle room.