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I’m a debtor.

I’d like that to be otherwise, but I’m pretty close to the limit of what I can do to change that.   Don’t get me wrong, it’s changing, but there is a limit to how many side projects I can take on at one time.   So, I’m in debt and likely to stay that way for the next couple of years.

As part of my budget, I set up a few categories of items that are either necessities or “really wants” without being immediate expenses.  For example, I’m setting aside some money each month for car repairs, even though my car isn’t currently broken.   When it comes time to fix something, I hope to have the money available to fix it, without having to scramble or <spit>  tap into my emergency fund.

All told, I have about a dozen of these categories set up, each as a separate INGDirect savings account.  Twice a month, a few hundred dollars gets transferred over and divided among the savings goals. Most of these goals are short-term; they will be spent within the year, like the account for my property taxes.  Some of them are open-ended, like my car repair fund.     Some are open ended, but will eventually end, like the fund to finance my son’s braces.   All of the accounts are slowly growing.

As I’ve watched the progress of my savings accounts, I’ve noticed something funny.

My confidence is up.

It may only be a few thousand dollars, but it’s more money than I have ever had saved.   The vast majority of this money will be spent over the next few years, but having it there, now means that I have tomorrow covered. For the first time in my life, I’m not living paycheck to paycheck.  No matter what happens, I know I can make ends meet for a couple of months.  That fact alone has reduced my stress level more than I could have imagined.

Two years ago, I was sure I was going to file bankruptcy.  Now, I’m looking at being just two years away from having all of my debt gone.  I have faith that my future will be bright, and only getting brighter.   If I can dig myself out of this hole once, I can do it again, no matter what happens.

This has brought a calm that I can’t easily explain.   I don’t have to worry about where next week’s groceries are going to come from, or how we’re going to afford braces in a couple of years.

Having an emergency fund and some auxiliary funds has been entirely worth the work we’ve done for last two years.  Have you noticed any changes as you pay off your debt and build savings?