My husband and I have several different savings funds. We have most of them at ING Direct, for a couple of different reasons.

I’m sure we could narrow down the number of accounts we have if we wanted to, but for me having multiple accounts at the same bank makes it easier to track their purpose. (A spreadsheet could do the same, I suppose, but this is the method we use.)

But how did we decide on what we wanted to be saving for? Mainly through experience (trial and error) and also based on our goals.

For example, traveling is a big priority for me. It’s the thing I love to do most, and so I absolutely want to be able to do it as much as possible. My husband isn’t nearly as hooked on travel as I am, but he enjoys it a whole lot more when he knows he doesn’t have to worry about how it will be paid for. So that means that we have a travel fund. We contribute a little bit to it each month, but it adds up over time. I also have a separate fund for our eventual trip to Antarctica. I wanted it to have it’s own fund, since that’s such a big trip. Sadly that’s a very small fund right now, as it’s last in the priority list.

Then of course we have an emergency fund. I base mine off monthly expenses. Conventional wisdom says you should have 3-6 months’ worth of expenses in an emergency fund, but that doesn’t seem like nearly enough to me since I have had a very extended period of unemployment in the past. So in our case our emergency funds are based partly on conventional wisdom, tempered by my low risk tolerance in that area.

Finally we have funds that might be looked at more like general operating funds. They’re for things like paying our property taxes, paying our homeowner’s and flood insurance, replacing appliances, and paying vet bills. I base the “escrow” account on about 110% of our previous year’s taxes and insurance, and I keep revising the amount in our “appliances” account upwards because we keep spending more than I’d thought possible there.