How to protect my savings—from myself!

I've taken a large chunk out of my savings over the past few years.

Some of it has been for things like photographic equipment (which may or may not yield a return) and dental work (not entirely necessary but gave a much-needed psychological boost).

But I've also used the money to clear deficits in my monthly budget. It's a steady drip that's gradually adding up. I won't have any savings left if I continue like this! I have a Post Office deposit account. Is there a savings account that gives a reasonable interest rate but that makes the money hard to get at?

I'm reasonably good at doing a monthly budget at this stage. Every cent is given a job. The medium to large expenses are the problem. It could take five or six years to save for them, an unrealistic time-scale.

I'm sure in the best buys section that there must be a few 7-day notice up to 30-day notice accounts. Pick one with the longest time-frame to stop yourself from taking money out, or at least making it most difficult.

Would something like five years be an overkill?

Pingin, you need to approach this carefully. Firstly, don't lock away all your savings - you need to think in terms of term, some savings should rightly be long term (e.g. pension) some savings are short-term (e.g. saving for holiday) and some savings lie in between. I am not saying plan out exactly what each thing you are saving for, rather I am saying your savings serve multiple purposes and you should plan how you save around that.

Firstly, if you are dipping into savings to balance your current budget then perhaps the amount you are saving monthly is putting a strain on you. Start by working out why you are finding yourself dipping in to balance and address that, you may need to ease up a little on your savings or perhaps you need to correct an overspend somewhere.

Secondly, identify what sort of cushion you need to have access to on a short-term basis. Useful yardstick is a multiple of your monthly pay, say 3 months pay. Importantly, it doesn't need to grow continuously, this is an accessible amount that you maintain at a value level. Don't hive that off into a long-term saving account.

Thirdly, look at what you have to put in long term savings and how you want to save it. Do you want to place a lump sum on deposit, or is it savings you wish to build up incrementally or perhaps it is a bit of both. Look at what is available in terms of product and then decide.

5 years is reasonable for a long term savings product as long as you have access to a cushion fund to prevent your needing to dip into the locked away money.

What bank are you with? AIB have a 7 day online account you could sign up for.

Not being glib: "Discipline is simply choosing between what you want now and what you want most".

Thanks So-crates. I should have clarified that I have three savings accounts: one with the Credit Union, which is my rainy day account and is approaching half my yearly earnings; a holiday account with Bank of Ireland; and an account for long-term savings with the Post Office. It's this last one I'm worried about. I'm thinking of using this long-term money for doing up a property I've inherited.

Saving €150 a month for holidays (up from €100 as I ran up a big holiday deficit this year) and €100 per month (down from €500 p.m. a few years ago!) in the P.O.

TTI, discipline is not something I'm too good at, though I don't spend money recklessly. I'm wearing the same old clothes and shoes, day in day out. I use a computer budgeting program and know where I stand at the end of each month. The overall budget is always in the black.

Pingin, I think you are being a little harsh on yourself, the fact you have savings at all indicates you aren't quite as undisciplined as you seem to think you are (not an excuse to go wild but you've got to pat yourself on the back from time to time!)

Why are you breaking into your long-term savings if you have a rainy day account? Surely the rainy day account should be the one you access in those cases?

If you have a plan for the long term money then I would suggest that you work around that plan. Obviously you aren't planning to empty your savings to do the place up so I'm assuming a proportion of it is ear-marked for renovations and a proportion will remain as long-term savings? First thing to do is work out what that renovations budget is then. Second consideration would be when do you want to do those renovations? If it is in a year's time then a 5 year term is too long for that money to be squirrelled away (but it could be considered for the non-renovations money). Basically you need to move the renovations part into a separate space because it is now ear-marked in the medium term for a specific function. Will your current €100pm continue to go into your long-term savings?

Thanks so much so-crates; you're very kind.

That's a good question about the rainy day account. I suppose I tend to regard all the accounts as one pot. The rainy day account would be for if the roof fell in or the car was smashed, rather than for buying camera equipment.

Splitting up my savings sounds like a good idea. The renovation will be many years away yet. I have a Credit Union account in my home town which I could use for that money. My €100 will go into my long-term savings but I'd hope to save a separate amount for the renovations account.

I think I'm not too sure about why I'm saving long-term but it's probably to do with security in old age. I'm 54 now!

Thanks again everyone for great suggestions.

If you are planning not to use it for a few years definitely look in the best buys post and investigate options. The CU, particularly at the present time is not likely to give you the best rate of return. Check out fixed term deposit accounts and government bonds look to maximise your return while you are not using the renovations money. Good luck anyway!

Keep your savings in a different bank than your current account and don't sign up for online or telephone banking.

Force yourself to have to go in branch to make withdrawals. There's something about queuing and signing the slip that kills spontaneous withdrawals.

That's a good suggestion manninp2. It might make me think twice about withdrawals.