Wednesday, June 13, 2012

My Financial Counseling Session

My new bank, USAA, offers free financial counseling over the phone. My bank is known for it's excellent customer service, so I always thought about calling them up to see what advice they would have for little old me. Today when I was driving home from work the highway came to a total stop and I was sitting there for about 20 minutes dying in the heat. The temperature outside was about 95 degrees and my A/C needs more fluid as per my last car check up. The place I usually go to for oil changes quoted me $140 to fix my A/C. I got so frustrated because of the heat that I decided I was going to drive straight to the car shop to get my A/C fixed as soon as traffic started to move again. I looked up my checking account on my phone and saw I needed to pull from my e-fund to pay for this repair. My heart sunk it took me so much work to save up the $300 sad dollars that I currently sitting in that account, so sitting there sweating I called my bank to see if they could advise me.

I got on the phone with a super friendly lady who actually seemed like she was my age and knew exactly what I was going through. I explained to her all of my woes, my credit card balances my debt due to my dog's surgery. I vented to her about my sky high car insurance rates and my 27.63% interest rate on my used car loan, yes you read that right, 27.63%.

I told her I didn't know whether to save up $1,000 for an E-fund first because I felt suffocated by my credit card debt. I explained to her how I budget using two separate bank account, and funny enough she told me that's how she budgeted herself!

These are the steps she told me to take to better my financial life:

  1. Whenever I get paid automatically save $50. The reason for this is because I told her that I am always pulling money from my savings to finish covering my variable expenses (gas & food). Only putting $50 in savings is comfortable amount for me right now.
  2. Keep most of my money in my fixed expenses account and transfer $400 into my variable expenses account.
  3. After two weeks everything that is left in my fixed expenses account transfer half into savings and half towards the credit cards.
  4. Instead of saving $1,000 towards emergencies, she told me to save 1 month's worth of expenses which for me will come to $1,755.
  5. After I have saved up one month's worth of expenses then I am to call her back and we can start to discuss retirement savings.
I am so happy with this plan. I think this will really help me now get the ball rolling. As far as the A/C for my car - I decided to wait and budget for it. I have two big purchases that I have coming up $140 for my A/C and a plane ticket to visit my boyfriend which is looking like it will cost me around $150 - $250. 



  1. Interesting about the emergency savings. I think it's best to have 6-9 months of emergency savings before you think about retirement savings. I'll be curious to see what others think. Either way, good for you for being so proactive!

    1. One of the things the adviser told me is that I should start saving for retirement because the E-fund is something you are constantly working on. She assumes that you will always have a little emergency here and there so your efund will deplete while you retimenet savings will not.

  2. You're still getting the hang of things -- don't beat yourself up too much over going off your savings course so much. Do as your banker says (she gave you great advice -- I wish I could get my banker on the phone :P) and stay calm :)

  3. Yeah, I would work on your savings until you get to at least 3 months savings before talking retirement. But what a great (and free!!) service!! She gave you some great advice. It's all about baby steps.

  4. I think you're on the right track! What I've done is built up one month of savings and then tackled my debt, once the debt is cleared up I'll build up 3-6 months of savings and THEN think about retirement, but I'm pretty young so it might be different for someone who is a little older.
    Either way I think it's a good idea that you budgeted for your car AC, I've pulled from my E-fund before to fund car repairs and it's not a good feeling.

    1. Yeah that is the route I want to take too - build up 1 month of expenses, then get rid of the debt. I think I can build up 3 month's worth of an E-fund but 6 months may be too difficult.

  5. Traffic jams are when I take care o business plans, to! I've heard the same thing as up at least 3 months of expenses for emergency funds. I think it's good to get your car's AC fixed, though. That's what the emergency money is there for. I like her advice about splitting the money at the end of the month.