Update on Ally.com

About a month or so ago I wrote a post about how Ally’s online savings accounts work, which can be found here. At the end of that post I said I would post an update, so here it is.

When I last wrote about Ally.com, I had decided to open up just one online savings account and name it Car Maintenance. The money transferred into this account on a monthly basis from my regular bank is earmarked for, you guessed it, anything having to do with maintaining my car, including oil changes, new tires, and any other type of unexpected repairs.

Now however, not only do I have that one account, but I’ve added 3 others, titled College Books, Tuition, and Gifts. Basically I estimated how much per year I spent in each of these categories, divided that number by 12, and set up an automated direct deposit that transfers the amounts I decided on once a month.

New Spin on an Existing Concept

This brings me to a new spin on a concept that has been around for a while called the envelope system. This is a system that Dave Ramsey espouses on his radio talk show and in his books. Essentially, one is supposed to have a plain old paper envelope for every type of bill, especially those Discretionary Bills, filled with a certain amount of money. Once that amount of money is gone, then that’s it for the remainder of the month.

I’ve used the envelope system once before, but the problem I kept running into was when one of the envelopes was empty, I developed the bad habit of simply taking money from another envelope, which pretty much defeats the purpose of the system.

With Ally however, one has the ability to create an Electronic Envelope System, which makes it much more difficult to simply grab a $20 from another envelope and use it for something other than it was intended for. Plus it’s nice not to have to keep track of loose change.

Ease of Use

Using the money in these online savings accounts is quite easy as well. In fact, just the other day I had the oil in my car changed. All I did was pay for it using my debit card that was linked to my regular bank account, I kept the receipt, and when I got home I transferred the exact amount from my Car Maintenance fund at ally.com to my bank account. Simple as that.