I’ve decided to make a slight change in my savings habits, and coincidentally, there’s an article on CNN Money that mentions the same technique. It’s the latest feature in CNN Money’s “Millionaires in the Making” series: Mark and Lori Gorney. The article notes that their story isn’t the typical money-making-via-real-estate tale, which is a good thing to see once in a while.
One thing mentioned in the article is that any money Mark was paid for working overtime was put into savings immediately, in addition to the couple’s normal savings routine. Earlier this week, I decided to do this as well. My emergency savings account (held at ING Direct) and my Roth IRA (invested in TCEIX at TIAA-Cref) form my “emergency fund.” (I can withdraw my Roth IRA contributions — not returns — tax and penalty-free as a last resort.) Since reaching my emergency fund goals, I’ve slacked off a little in my savings habits. I decided that any money I get paid for working overtime should be set aside in another account.
Perhaps I’ll keep this “Overtime Fund” at Emigrant Direct where it can earn 3.25% in interest at this time.
Updated February 6, 2012 and originally published May 11, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.