How to Protect Savings?

[Raidra]

We're planning (hoping) to take a trip to WDW in January 2013. We get a sizeable tax refund every year and plan to save most of it for this trip. But I know us, if we just put it in a regular savings account, it will get spent.

What's a good way to protect that money for almost a full year? Would it be crazy to pay for the vacation as soon as we can book it (which is when, again?)? What would happen if we later got a PIN or something?

Thanks!

 

[nowellsl]

Put it in an online bank (I use Ally). Better yet, buy a 12 month CD. Ally has a no penalty CD. It doesn't pay much these days, but it may make it harder to get your hands on it!

 

[carebee21]

You can pay off your trip as soon as you can book it, which is usually mid-late summer of 2012 for a 2013 trip. Then if you get a pin or they offer a discount, they refund the money to you, but that can take awhile (I think they say 2 billing cycles, so maybe up to 2 months?) You can purchase Disney gift cards, but if something happens and you can't go, you'll be stuck with a lot of Disney gift cards.

Put the money into your savings account and don't touch it. I wouldn't put it in a CD. You're not going to get your tax refund until at least Feb. and if you need to have the trip paid off 45 days in advance, you're looking at mid to late november. Some places do offer a 6 month CD, but for the amount of money you're putting into it, it's probably not worth your time or the trouble to set it up.

 

[Luv Bunnies]

How about opening a new savings account just for your vacation fund? Keep the money totally separate from your regular savings and don't dip into it until you're ready to pay for the trip. After the trip, leave a small amount (around $100) in the account to keep it open, then start making deposits for your next vacation.

Here's what I did to save vacation money, although it might not work for everyone. My DH was unemployed for almost 2 years (thankfully, he got a job in January!). I was determined to take a trip to Disneyland this past July whether he was employed or not. I started saving change, selling scarves I had knitted, doing online surveys, saving recycling, etc. I kept all of the money in cash or gift cards that we could use on the trip. I had a hiding place that only I knew about, and I was disciplined about not pulling money out for other things. After saving for a year, I had $3500 for our trip. None of the money came from our regular paychecks. I was very proud of my "fun fund!"

 

[emma'smom]

Vacation Savings Account-- I have a savings account that is separate from my regular checking and savings accounts.


I toss the "extra" $$ that comes in occasionally into that account. $$ from gifts, consulting jobs, extra contracts, reimbursements (mileage, picking up supplies for girl scouts or PTA, etc.) Often those reimbursements come long after I've absorbed whatever I spent into my budget.

Sometimes I toss in an extra 50 bucks or so right after I get paid and feeling "rich" for the moment---this usually that just means finally digging the frozen leftovers out from the freezer and using them to make a meal now and then rather than going out now and then.

Then that $$ is there when we want to do something fun....

 

[ICF]

If you really dont want to touch it for a year (and can't just leave it alone in a regualr savings account)....

Put in it a CD at a local bank or a place like Ally (which I've used before).

The interest will be very minimal (and you'll pay taxes on the interest you do earn) but you know the all the money - and a little extra -- will still be in there a year from now.

 

[HM]

For us, if it goes in savings, it's forgotten money. We don't touch it except for the big things like college tuition. But if you can't see your savings in this way, it might be best for you to get a 1 yr CD with your refund because that is much harder to get at.

 

[Karenj2]

We use ING for things like that - we've got an EF account, a Christmas Account, a general savings account (for big-ticket items), and an account for our DD. You can open these accounts with very little, and they're harder to touch unless you get ING's checking account. In order to access the money, you have to transfer it to your regular bank and then write a check off of that...

 

[lizabu]

If I thought I might touch it in my savings account I would just pay it to Disney. If you get a pin and will save some $ they will allow you to apply the PIN and refund you the difference.

 

[gracie1]

My savings account is only used for emergenices. Once the money is deposited, it is forgotten about. Why have a savings if you spend all the money that is in there

 

[puffkin]

I also have several ING accounts for just this reason. Takes a much more conscious effort to get the money.

You could also open a savings account at a bank or credit union that you don't currently use. Maybe in the next town over so that you aren't tempted to go pull from it for everyday things.

 

[Raidra]

My savings account is only used for emergenices. Once the money is deposited, it is forgotten about. Why have a savings if you spend all the money that is in there

Just to clarify, I'm not spending our savings on frivolous things. My parents are both ill and declaring bankruptcy.. today they asked to borrow $100 for my dad's prescriptions. I have a hard time saying no, but if I can't actually access the money, then I can't say yes, can I? Also for stuff like car repairs, that we would scrimp and save for if we didn't have the money, vs. just pulling money out of our savings. Or if the kids need dental work.. etc.

 

[MrsPete]

Your savings are safe; your account doesn't need protecting. You're asking about self-discipline. How do you keep your hand out of the cookie jar?

You just say no.

The one suggestion I'd make is that you move your savings account to a different bank -- not the one where you keep your checking and your "everyday money". Make it a bank that's a little inconvenient for you. Do refuse the offer of an ATM card, and you do not sign up for online banking. Thus, the only way you can get to this money is to make a special trip (hopefully across town) to withdraw it in person. That'll make you stop and think before you access the money, and that's what you really need: Just a roadblock to help you resist temptation.

 

[bumbershoot]

Just to clarify, I'm not spending our savings on frivolous things. My parents are both ill and declaring bankruptcy.. today they asked to borrow $100 for my dad's prescriptions. I have a hard time saying no, but if I can't actually access the money, then I can't say yes, can I? Also for stuff like car repairs, that we would scrimp and save for if we didn't have the money, vs. just pulling money out of our savings. Or if the kids need dental work.. etc.

Maybe you could put *part* of your savings into an account specifically for things like that. A car repair fund, dental fund, even "help the parents" fund.

Put the rest into a savings account specifically for that, and do NOT get a card for that account. Like others have said, maybe put it into an account apart from your regular bank, so you can't easily transfer the money over.

But since you guys have these things come up, and I bet you could sort of estimate what you might have come up based on past years, you NEED an account to cover them, so you're not raiding your vacation account for it.


For us, we realized after several years that our savings accounts need names on them. If money just got plunked into a generic savings account, it woudl go towards generic things. Nowadays, and I will say that we have LOTS of room for improvement on this, we have a vacation account (DH's stock grant money goes into this), we have a small savings account that also holds money for future insurance premiums (and that took 6 months of HARD work, paying the monthly car and renter's insurance premiums while also saving so we had the 6 month car premium and 1 year renter's premium ready to go for the next renewal), and even inside of our normal checking account I have "chunks" of money that I keep track of in a notebook (I don't use a register anymore).

Now that our accounts (and little parts of accounts) have *names*, it's nearly impossible to steal from them. I highly recommend doing it.

 

[tlbwriter]

Your savings are safe; your account doesn't need protecting. You're asking about self-discipline. How do you keep your hand out of the cookie jar?

You just say no.

That's helpful.

 

[GaSleepingBeautyFan]

I think I'd find an online account for it - like ING or something.

Good luck!