The Secret to Finding Your Magic Number
What can I do right now to help myself feel comfortable right this second?
Ah, your magic number. The mysterious dollar amount that keeps your savings account from turning into an “I went over budget on my entertainment spending – again” account over and over and over again. For the past few months, I’ve been constantly on edge because I feel as though I don’t have enough of a cushion in my savings account. And sure, I bet some people would look into my bank accounts and think I’m crazy, whereas others would look at me and shout “Ooh girl, you really should be uncomfortable”.
Balancing overspending is one thing, but “over-saving” or “under-saving” issues can be much harder to adjust.
If you’re anything like me, you want to find a magic number that allows you to breath without feeling like a giant horse (idk guys) is sitting on your chest.
You want to be able to head out on a spur of the moment road trip to the mountains with your BFFs, and then complain about how much you hate mosquitos and your ability to burn in 2.6 seconds flat on the way home. Man, I miss summer.
Anyways – back to my point.
How do you know when you’ve saved enough money?
I think emergency savings accounts are boring. I avoid calling my emergency account anything similar. Instead, it’s labelled “Money to protect your other money. Oh, and also your reckless behaviour”.
Yeah, you better believe that fits on my online banking, who is now thinking “why did we ever let our clients name their own accounts?”.
Everyone knows (okay,almost everyone), that it’s recommended you save 3-6 months of your salary into a special account in case you lose your job, lose a limb, or lose your marbles.
But as someone who has saved 3 months of her salary, I find it’s not enough. It’s not enough to allow me to feel comfortable dropping an extra $100 at the grocery store of my regular budgeted income, so how can it be enough to sustain me in case I can no longer work?
I mean yes, maybe once I hit the 4-month mark, the 5-month mark, or the 6-month mark I’ll start to feel a little bit more comfortable. But what about right now? What can I do right now to help myself feel comfortable right this second?
That’s easy. By using the magic number!
In a separate account from my “Money to protect your other money. Oh, and also your reckless behaviour”, I save a smaller amount each month in an account called “Comfy Couch”.
And to find the magic number to fill my account, I did this:
AVERAGE SPEND PER MONTH ÷ SIX MONTHS = Your magic number
What’s in my “Comfy Couch” account for the months I overspend, under-save, or just plain fail at money?
And that silly small number was all it took to make me feel comfortable. Whenever I need to use some of that money, I simply take it out, and refill the amount the next time I have available funds to do so.
The best part about the magic number? It’s a small milestone you can hit before you have to dive into the world of “Hey, here is 6 months of my hard earned money just sitting in an account all sad and lonely”.
Also, this will be my last blog post of 2016! Yay! But also sad face. Feel free to sign up for my newsletter to get some sneak-peek previews into what’s coming in 2017 – and (even better) to see some of my other writings around the internet. Have a wonderful Christmas, and an even more wonderful New Years! xo.
Did you calculate your magic number? Let me know what you got in the comments!
Want to know what you would need for your own emergency fund?