How To Avoid Spending Your Savings

Three fool-proof ways to keep your money where you want it - in your savings account, helping you achieve your money goals. Yes, even if you have a hard time leaving it there!

Saving is the key to basically every big money goal you and I have in our lives, friends. But if it’s ever going to help us buy a car, or a house, or take a grand vacation? We need to avoid spending our savings on other things first.

I know, it seems like the most basic of all basic money concepts.

If you spend the money you have in savings, it’s not in your savings anymore – duh. But avoiding spending your savings is sometimes easier said than done.

Trust me, I speak from personal experience. When I first started saving my emergency fund, it quickly became my everything-fund, because I never defined why an emergency fund mattered to me.

Don’t even get me started on my poorly defined retirement savings in my early twenties, half of which came right back out of my TFSA when it was time to buy Little Car.

I’ve learned my fair share of expensive lessons from spending my savings, but since then, I’ve managed to put away money for a whole bunch of important goals, and have yet to touch a single dime of it for anything other than its intended purpose.

Here are the three things that helped me make that change.

#1. Know why you’re saving the money

My biggest rookie mistake when I started saving was not having a clearly defined reason behind why I was saving. The best answers I could have given you for both my emergency fund and my retirement accounts – a TFSA and an RRSP – was “It’s what you’re supposed to do when you’re an adult.”

Which sure, is true, I guess, but it turns out it’s also a horrifyingly unconvincing reason not to raid those accounts when you need cash for something. Or want cash for something.

Now, each of my accounts has a separate, clear reason for existing, tied to goals that really matter to me – like making sure my dog has a fully-funded emergency fund, because the stress of an unexpected vet visit is bad enough without worrying how I’m going to pay for it.

I’ve even nicknamed my accounts, so I know that this one is The Dog’s emergency fund, not just account 002239485*.

*not my real account number, but good try.

#2. Make your savings hard to access

I have two accounts that would be primo candidates for funding a shopping spree: my emergency fund and my house down payment fund.

That said, they’re also the two accounts that I hope to need access to the least. I should only be using the emergency fund in the case of a real emergency, and even then I have enough room on my credit card to carry an expense for a few days until I can access the funds.

And my house down payment will hopefully be used all at once someday, when it eventually grows to the size of down payment I want to put down on a house.

So as those two accounts grow and become more and more tempting, I decided to put them out of sight and out of mind.

I literally moved them to another bank.

When EQ Bank showed up with their killer interest rate offers (that, although down from their peak of 3%, are still pretty enticing at 2.25%) I decided that since I didn’t need easy access to my two biggest savings accounts anyways, I’d move them over to EQ Bank to earn a few dollars more interest every month. (Right now I’m clocking about $22 in interest every month, which is pretty fun.)

As a bonus, it made those accounts just enough of a hassle to access that I never even think to look at them. Since I’m not raiding them on a regular basis, they can sit there and do their thing, waiting for the day when I do need them.

#3. Have spendable savings, too

Even if your savings are earmarked for something really important to you, and you’ve stashed them somewhere pretty inaccessible, there still might come a time when damn, you actually do need the money.

That’s where your spendable savings comes in, like the superhero it is.

I know that adding a separate savings goal, when it can easily feel like you’re drowning in competing priorities, might sound impossible. But hear me out.

You’ll have a way easier time of not spending your savings if you have a stash of cash that you’re actually allowed to spend.

It's important to have spendable savings if you want to avoid spending your savings.

For me, it’s my vacation-and-gifts savings account. While yes, it’s intended to cover my big vacation expenses, and the occasional big gift to spoil a loved one, it’s also an account that I can raid if and when I need to. If times are tough, I can always cut back on my vacation-ing and gift-giving, and use that money elsewhere.

Or, if I’m the one who really needs the occasional big gift, I can probably make that work, too.

This account is my first line of defence against tapping into my emergency fund, or my house down payment fund, or my dog’s emergency fund if I need some extra money.

Even if you can only swing $50 a month to start up your spendable savings account – or less! – it’s one of the best moves you can make to ensure the long-term health of your other savings goals.

So if you find that money comes out of your savings accounts as quickly as it goes in…

  • Make sure that what you’re saving for really matters to you
  • Stash your money in a slightly less accessible place
  • Start up a spendable-savings account to insulate your other savings goals

Presto manifesto, you’re a saver. Or something like that anyways.

How have you managed to overcome the spending-your-savings habits? I’d love to hear of any additional tips or tricks you’ve found that work for you!

Desirae is on a mission to demystify and un-boring financial info for millennials, so that we can all save more money, spend on stuff that matters to us, and still have a latte or two along the way. Money is literally why we can have nice things, and Desirae is committed to helping make sure you know just enough to make the right calls for you. (She’s also committed to her expensive dog, her side hustle, and her retirement fund.)

20 Comments on “How To Avoid Spending Your Savings”

    1. Desirae

      I hadn’t seen that offer – thanks Sherry! Usually their promotional rates are only on new deposits, so I haven’t been hop-scotching my savings between the two banks (Tangerine is my day-to-day bank.) But definitely good to know if someone is thinking of making the switch!

  1. CreativeDaffodil

    I think the only way to truly overcome the habit of spending your savings is to change your mindset. Your suggestion of understanding why you are saving is a great start. You can put it on a safe, inside of an oil tank, under the ground, covered by a concrete structure, with a house built on top of it, but if you don’t change your mindset, you’ll still get to it and spend it. This, like everything else, starts in your mind. 😉

    1. Desirae

      Totally true! Although if I build a house on top of something I’m probably going to have a serious mindset change, that is a *ton* of work, lol. (I’m just kidding – you’re 100% right!)

  2. Amanda @ centsiblyrich

    Making savings hard to access works really well for me. It takes 3 days for a transfer to go through from my online savings account to my checking account. After reading your post, I realized I also have a spendable savings account (though I hadn’t thought of it that way previously) where I can access money fairly quickly. I pretend to live paycheck to paycheck in my checking account, so it’s good to have the spendable as a quick backup.

    1. Desirae

      Omg same here! That’s exactly how I use my chequing account – I try to aim for zero at the end of the month, but pull from savings if something does come up. I just look at it as being overly optimistic with my savings contributions each month – not the end of the world if I need to pull back a bit, but it definitely makes me think about whether I really need something before diving into savings to cover it!

  3. Samantha

    Thank you for writing this! I’m constantly struggling between saving my money for an emergency and putting it towards my remaining debt. I’m only $13000 away from being debt free and it’s so hard not to take the money from my Savings and knocking that balance down. I do have my checking and savings in the same bank, so I’ve been looking for options to move one to a less convenient location so I quit being tempted to borrow.

    I should also maybe have multiple accounts like you do. You are right, what is an emergency? When you get into an accident in a parking lot (guilty)? Or when your cousin has a wedding in FL? Perhaps when you are just really freaking hungry in a ritzy part of town and need to go to a fancy restaurant cause that’s the only place there is food? I have been using my “savings” for all of those situations and that probably explains why it never really grows.

    1. Desirae

      That was *so* my emergency fund a few years ago! Seriously, it was everything from new running shoes to vacation to weddings to…. the list goes on. Separating it was tough because all of the balances went from “this feels like a big amount!” to “omg they’re empty” but after leaving them separated for a while I couldn’t be happier about it.

      I also don’t know if this is reassuring or not, lol, but that wanting to steal from accounts to fund other accounts thing is SO REAL even when one of the goals isn’t debt! I consistently want to throw all of my savings towards the house downpayment goal right now (because it feels like the most time-sensitive and biggest goal) and I’m reminding myself all the time why the system I have set up is realistic and was not based on emotion, haha. If nothing else, by the time you’re done crushing your debt you’ll be a total pro at this! (Also: You’re such a rockstar and have made SUCH progress, I’m doing a happy dance for you right now!)

      1. Samantha Zimecki

        Thank you, thank you! :]

        And you are right, it’s the emotion that’s the trigger. So excited to be finally done with the debt soon and so that just makes me trigger happy on the transferring funds.

        We’ll get there tho!

  4. Maggie @ Northern Expenditure

    I love the account that allows you to travel and gift! Having freedom to do that is awesome. I love your tips. I utilize the “keep them hard to access” tip. I funnel everything out of accessible accounts as soon as it hits!

    1. Desirae

      Thanks Maggie! I know if I’m doing something you’re doing, I’m on the right track 😉 Also, I loved your trip breakdown post so much! I’m going to do one when we get back from a destination wedding we’re attending out west in the Canadian Rockies in a few weeks!

  5. Latoya @ Life and a Budget

    I do all of the above and yes, they do help. I asked one of my friends if they kept all of their savings grouped together and they did, which makes sense because they are the spreadsheet, type-a kinda person that knows what every dollar is allocated for. Me however, I would look at that balance and yell out to my hubby that we are balling and go spend on all the things. So yes, this definitely helps bring me down to reality;)

    1. Desirae

      Hahahaha oh gosh, that was me, minus the “knowing what every dollar was for” thing – I’m much more with you on the balling side of things! I found that anytime my one account would get to be over $2K, I’d spend it on something, whether it was a vacation, or shoes, or a gift, or something. That number was like my kryptonite, which was no good when I knew I needed way more for a real emergency fund! Since separating them out, I’ve managed to pass $4K in my emergency fund which feels like a small miracle.

  6. Kara

    I LOVE having multiple savings accounts! Even if it means that they may take a little longer to grow across the board, I love dividing my money up. I currently have five savings accounts and it’s a perfect fit. I keep a little spending buffer in my checking account, and then definitely save up ‘spendable’ money. My travel account is going to get tapped in a month, and that’s ok! That’s exactly what it’s for!

    1. Desirae

      YES! The slow growth thing is so real! I’ve got six accounts right now, so I feel you, lol – but as slow as they’re all going, they’re also creeping past milestones that I never would have hit had I kept them all in a single account.

      And my travel account is getting used next month too! I can’t wait to hear about your trip and will of course be blogging about the finances of mine (I started planning for this trip last year, lol. There have been credit card bonuses involved – I’m such a travel hacker.)

  7. Kate

    This is why Tangerine and the freedom they give to have multiple accounts is my JAM. I don’t have a Tangerine client card either, so that makes the money harder to access, giving me time to consider whether it’s really worth it. I miss the convenience of having everything in one place, but it’s so much better for my overall financial health to keep them out of sight and out of mind : )

    1. Desirae

      Ahhhhh yes yes yes 100x yes, Tangerine is my homegirl. I have all my accounts named too, which is the most fun (and easy to set up) with them! They’re the OG in terms of getting me to set up multiple savings accounts, because it’s just soooo easy to do (and they actively encourage it, lol.) I do use it as my “regular” bank, and am literally realizing as I write this that I guess I could use my client card to take money out of savings, eh? Haha I use it sometimes to get cash out of my chequing but like… rarely, because cash, gross.

  8. Scott @ Couple of Sense

    Great plan to make your “no-touch” savings less accessible, even better to have them in a different bank all together. I also love the Dog Emergency Fund idea, you can’t steal from your dog to buy something fun – their ever judging eyes will drive you crazy!

  9. Brian Stephens

    This is exactly what I’m working towards, separate accounts for separate savings goals. I need to setup percentage goals for each account, too.

    Right now I have investment deposits pulled out weekly to different accounts (brokerage, retirement, etc) and started weekly debt payments the same way. But now I need separate savings accounts for an emergency fund, vacation fund, house repairs fund, etc. Thanks for spelling out the psychology of it, very helpful for me.

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