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A revolving savings account is seldom talked about and seldom mentioned. Yet, this is your #1 savings account your household should have in place. A revolving savings account is your first line of defense against the everyday, every-week small nagging things that take your cash.

Our definition of a Revolving Savings account:

A passbook savings account linked to your checking account with a “waterline” balance of 20% of your monthly gross income, which is your pay before taxes and allotments are taken out. The account balance will fluctuate from week to week, month to month. This is not your emergency account but your first line of defense to keep you from using your emergency account.

A revolving savings account is used for:
  1. Gas money three days before payday and your broke
  2. The un-planned weekend food run
  3. Unplanned everyday expenses, if needed
  4. The weekend barbeque with friends, which most all American households will claim as an emergency and pull funds from the emergency account for potato-chips.
  5. A flat tire, a new tire, most all vehicle maintenance
  6. The annual vehicle license tabs you forgot to budget for
  7. Your child forgot to tell you about the school activity that is $75 and needs it today

Example of how much a revolving savings account should be: Household monthly gross income is $4,200 X .20 = $840, So, $840 is the waterline goal for your revolving savings account based on your current monthly gross income; pretty simple right?

Tip: Four months before the holidays, August you may consider increasing your revolving savings account in preparation for the up- coming holidays. Add a cushion as the holidays always cost more than we expect, or budget for.

A revolving savings account keeps you from tapping your emergency savings, as an emergency savings account is for true emergencies, such as the loss of a job or major car repair.

Start building a revolving savings account today. Simply start saving $10, $20, $50 per paycheck and placing into a passbook savings account that is linked to your checking account.

We hope you get the gist of what a revolving savings account is, and the importance of having one in place. Without a revolving savings account most household never truly have an emergency account-that is saved and used for actual emergencies.

TSP Payday - Millionaire
Savings Accounts Credit and Debits
Buying a Vehicle

Buying a House


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