Tips like these helped us pay off $127K in debt. You can read our story in  Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After.

Welcome to 31 Debt Free Missions! A new feature this year on Queen of Free, during each day in January, I will provide 31 concrete missions or challenges for you to take on to #SlayDebt and take charge of your finances this year. Each mission will take you less than an hour (some will only require 15 minutes). Whereas, 31 Days to Kick Debt in the Teeth (which I’m reworking this year and reposting in January, too) focused on some of the philosophical changes you need to make in order to be successful with money, 31 Debt Free Missions are action steps to put into place after you have your thinking straight. Even better, during the month of January, I’m revisiting each of these challenges in order to sharpen my money saving and debt slaying skills.

Are you ready? Your mission is as follows:

Day 21: 5 Savings Accounts to Start Today

Let’s face it, money is ridiculously tight when you’re paying off debt. Long term savings goals are pretty much out the window as you devote every amiable penny toward the goal of freedom. However, it is a good idea to have some small short term savings accounts to sock away bits of money if you can. Even if you only have $50 to $100 put back, you’ll be happy you do. Then, on the other side of debt, you can begin to develop these savings accounts even more.

Emergency

If you’ve read any sort of debt repayment book, you know that most financial gurus suggest you save for emergencies before you begin the process of slaying debt. I wholeheartedly agree. There is no magical number here; however, when you consider most life crises, things fall apart to the tune of $1000. You can buy a new water heater for less than $1000 (because we did that), you can put new tires on the car for less than or right at $1000 (unless you drive a humvee and also, we did that), you could pay for a root canal, or buy new shoes for your kids, or have your furnace repaired (um and yes, we did all of those things while we were paying off debt). I understand some of the supa-savers in the house might want a little bit more than a grand saved in case of emergencies. I ain’t gonna hate you for having money in the bank; however, really think about how much you save vs. how much you could pay off (and not be charged interest for). For those of us who have lived through flying by the seat of our pants when it comes to emergencies (raises hand high and waves), those days are over. You need several hundred dollars in the bank, yo. Begin saving now. In Slaying the Debt Dragon, I brainstormed a number of ways for you to kickstart your efforts. Want to read more about emergency funds? Check out: Emergency Funds Are Meant for Emergencies and 31 Ways to Kick Debt in the Teeth: It’s an Emergency! It’s not a question of if you’ll have an emergency, but when. I’ll be honest, you don’t HAVE to set up the other savings accounts mentioned in this post while you’re paying off debt, but this one is not optional.

Health Savings Account

If your insurance plan allows, you need to put back some money for healthcare costs. Our insurance plan had a provision for an HSA, but we still had to go the extra step of setting it up ourselves through our bank. Whenever I can chuck any amount of extra money into this account, I do. You can pay for your healthcare costs directly (we have a debit card that works only for that account) and there are tax advantages, too. Again, it’s not a question of if you’ll be sick, but when.

Christmas

I’ll be honest, we didn’t save intentionally for Christmas until we were out of debt. Every other year, we just worked our way around things, cut back on life, and even sold stuff in order to scrape together money to buy for our kids. It’s wise, even if it’s only a couple of dollars a week to sock back some money for Christmas. Do it NOW (in January) instead of waiting until Black Friday and then wondering what in the heck you want to do. Christmas comes every year. Don’t be surprised when you don’t have any money. Save instead.

Car Sinking Fund

Since being debt free, every month we have intentionally put back money to save for car repairs and a new car. In the past, we used our emergency fund to take care of car expenses. Now, we have a separate account that helps us pay for regular maintenance, repairs, and even helped us pay cash for a new-to-us car after we were out of debt. You don’t have to put thousands of dollars in this account, just a little bit at a time.

Family Gifts

While we were paying off debt, we didn’t regularly budget for any sort of mad money. What can I say? We were a little hard core.  I know plenty of debt slayers need that little extra cushion per month so that they don’t go hog wild and fall off the wagon. Being too restrictive can lead to destruction if you’re not careful. I’ll be honest, I can ratchet back spending on myself (um, it’s been a year since I had a haircut) much more easily than I can on the people I love. I wish that we would have more effectively budgeted for family gifts – birthdays, Valentine’s Day for the girls, Easter baskets, and just because gifts. So now, we do have an envelope for this very purpose. It never has scads of cash in it, but there is always something there when we want to bless someone in our family.

I’d love to know what special accounts or out of the box envelopes where you are saving. Let me know in the comments.

Now that you’ve received your mission, DO SOMETHING ABOUT IT. Also, if you want to be sure you don’t miss a single update in this series, go ahead and subscribe! Updates will come to your inbox everyday at 5 PM.

Miss the other missions?

Read:

• 31 Debt Free Missions: The Restaurant Challenge
• 31 Debt Free Missions: Adjust Your Withholdings
• 31 Debt Free Missions: Quit Using Credit
• 31 Debt Free Missions: Go to the Library
• 31 Debt Free Missions: Cutting Cable
• 31 Debt Free Missions: Ditch Your Memberships
• 31 Debt Free Missions: Reorganize Your Pantry
• 31 Debt Free Missions: Make 3 Phone Calls
• 31 Debt Free Missions: Bank Field Trip
• 31 Debt Free Missions: Make Your Laundry Detergent
• 31 Debt Free Missions: Unsubscribe Now
• 31 Debt Free Missions: Stop Your Money Leaks
• 31 Debt Free Missions: Regular Car Maintenance
• 31 Debt Free Missions: The Prescription Switch & Save
• 31 Debt Free Missions: Kill the Fees
• 31 Debt Free Missions: Change Your Car Insurance
• 31 Debt Free Missions: Organize the Game Closet
• 31 Debt Free Missions: (Re)Build Your Budget
• 31 Debt Free Missions: Save Money On Appliances
• 31 Debt Free Missions: Saving Money on Gasoline

My book is now available: Slaying the Debt Dragon: How One Family Conquered Their Money Monster and Found an Inspired Happily Ever After. You can also check out Inspiration to Pay Off Debt: 30 Days of Encouragement from the Queen of Free on Kindle.  

This post contains an affiliate link. That means when you get a great deal or maybe even something for free, you also help our family pay off our mortgage early. And for that, we royally thank you!