Lacking a Nail

What about the interest? What about money not spent at the end of the month? If you have a savings account you will get interest at the end of the month. If you have envelopes (spending categories) you won’t always spend everything in the envelope. So what do you do with this extra money?

Like everything money that depends on you. Sometimes it’s “off the books” money that they can do whatever they want with. Sometimes it’s extra income that to put toward goals. Sometimes it’s a chance to re-balance the books after unexpected expenses or mathematical mistakes.

When I first started and was using literal cash envelopes extra money would become part of next months budget. That got to be a headache. I’d count what was in each envelope. Subtract what was in the envelope from what would be going in the envelope. That wasn’t too hard. The frustrating part was then accounting for what was in each envelope when determining what to withdraw from the bank. Since it was usually a bunch of ones if I was logical and just combined all of the leftover money into one envelope. I’d have an envelope that was ridiculously thick because it was stuffed with ones. I could never get it quite right.

What I do now? I have some accounts that the interest stays in. I only remove money from my Emergency Fund account or accounts saving for my child for those expenses. That includes the interest.

Other accounts, the interest, and any extra money at the end of the month gets pooled together and will be dispersed based on need. Did everything run smoothly? Good, it’s going toward savings goals. Some years I have goals that only get leftover money. They’re want goals, not need goals. Did you hit a bump in the road? It’s okay, that happens, this money can be used to help smooth it out.

You don’t have to put interest income and leftover money in the same bucket. You can decide that all interest money will go into a savings account for a new phone. While any extra money becomes fun money. Whatever you decide, try to stick with it for six months to a year. If you keep changing your mind you won’t see any progress.

The interest amount will stay fairly regular. As you save it increases, as you spend it decreases. The leftover money; sometimes it’s nothing, sometimes it’s a lot. This money always adds up.

I shared in a previous post that my HYSAs bring in about $1,000 a year in interest. That’s a lot of money. Because it adds up. Consistently putting that money towards a financial goal will make a difference over the course of a year. I get this much interest because I spent years, almost two decades slowly moving myself into this position. I know to some that is a pittance, I know to most that is a hefty sum. To the latter, you climb a mountain one step at a time. Make your plans, keep consistent, if you get any windfall at all follow your plan.

P.S. If this was useful my one-page Sinking Funds Tracker is in the shop, or you can tip on Ko-fi or PayPal. One tiny move is progress.

This post reflects my personal experience and opinions. I share our real-life money – rounded numbers, personal choices, (tiny) next steps. It is not financial advice. I’m not a financial advisor. Budgeting and money topics are shared for education and entertainment only. Your situation is unique; verify details before acting. Small steps count.

Personal experiences only—this isn’t professional advice. See Disclosures and Terms.