Troubles Saving? How About A Guarded “No-Touch Account”?

For today’s post, I’m featuring a former student. Olyvia worked in the school library with me as a co-op student for 3 semesters before she graduated in 2013. She has now returned as a volunteer, and it’s wonderful to see her transition from a rebel teen to a mature young woman. Even as that teen though, Olyvia was a hard worker who loved books. After doing custodial work for three years, she has decided to pursue her love of books once more. She’ll be taking library studies at a community college this fall. 

Olyvia grew up with her brother and her single mom, who suffers from disabilities and has been unable to work. As a child, Olyvia pitched in by helping with household chores as soon as she was able to, and later, she contributed to her family financially. She left home to live on her own at the age of 17. 

Olyvia uses a “no-touch account” for her savings. It’s an account that is set up so that she can’t access it without her uncle – because as she said last week, “I can’t trust myself with it.” This was significant for me personally, since I had a hard time accepting the idea of a “no-touch” account guarded by another person for myself. Olyvia seemed to have no qualms about using this strategy. I wanted to find out why, and so I asked if I could interview her. I’m so glad she accepted. 

As you were growing up, what were the messages that you received about money, both spoken and unspoken?

Things were tight, so I was always taught if you have food in your mouth, a roof over your head, and your bills are paid, you’re ahead and you don’t need anything else.

When you first started to earn money, how did you manage/budget it?

When I first started to really earn my own money, I had two full time jobs, so I had more than I knew what to do with. Putting away at least 70% of my paychecks was not an issue. I put it in a locked savings account that I couldn’t access without my uncle, and I didn’t touch it till I got my first apartment.

Did you experience any unexpected financial hits once you moved out on your own?

I lost my room-mate all of a sudden, and that caught me completely off guard.

What prevented you from attending college the year after you graduated from high school?

The first year it was by choice. I wanted a gap year, and despite the warnings of many people smarter than I, I believed it would only be one year. After that, my hoped-for source of funding for school (my dad) fell through, and fear of student debt made me wary. After a few years in labor jobs, the possibility of student debt became less scary than the idea of having to work forever at a job I didn’t like.

Describe the “no-touch” account that you have. For what purpose are you saving that money?

It was one of the first accounts I made, and I made it when I was 15. Its original purpose was so my father could put away money for me, but since he never does anything he says he’ll do, he never put a cent in. I began to use it when I got my first jobs to save up for my first place and all expenses entailed. Since then it’s been used to save up for any big purchase I cannot make at once – since I lack the ability to hold the money long enough to save up without it. Examples include the first and last months’ rent for my last apartment, a laptop, school fees.

Did it hurt your pride to acknowledge that you needed this type of set-up to succeed at saving? Or was it simply a practical solution – no pride involved?

Not at all! No one I grew up with was good at saving money, so it was actually a point of pride for me that I’d found a kind of loop hole in my poor money management. If I paid my bills and did the groceries and put the set amount of money in that account, then I could still have fun and waste the rest of my money however I pleased.

How is your no-touch account working for you? Do you think you will continue with it? Is it possible you’ll outgrow the need for it? Is it possible you won’t?

So far it’s become just the way I’ve programmed myself to do things, and I think I’ll use it for as long as my poor uncle will put up with it. I don’t think this would work without someone as trustworthy, patient, and reliable as my uncle. Hopefully by the time he’s tired of it, I’ll have a spouse who understands my quirks and doesn’t mind helping me manage myself – a guy like the partner I have now.  

What do you think of the idea of a no-touch account that is guarded by someone else? Have you ever used this strategy? Your comments are welcome.


24 comments on “Troubles Saving? How About A Guarded “No-Touch Account”?

  1. Thanks for sharing your story Olyvia. Best of luck to you! Very mature of you at a young age to identify that you needed a no touch spending account. I have never used one, but sounds like the key is having that trustworthy person in your live to help you with it. Your Uncle sounds like he fits the bill. Continued success!

  2. We are putting money in “no-touch” fund for vacation this summer. That way our vacation savings won’t seep into our regular savings account that we use for our monthly bills.

    1. So Olyvia isn’t the only one using this strategy! Thanks, Josh. I’m glad to hear the no-touch account concept is working for you.

    2. Just to give you a heads up, I’m planning on including a link to this post in the upcoming article I am going to write about family vacations & I plan to write about “no touch account” for a portion of the post.

  3. Great work, Olyvia! Loved reading your story. And I love the idea of the “no touch” savings.

    I have an online savings account that is a pain to access – I guess it is my no-touch account. I send $$ automatically every month, but I never remember the password and it takes 3 days to get the money transferred. Unless I know I’ll have a large expense coming up, I never touch this account.

  4. There was a really interesting planet money episode about informal savings institutions like this (only this is a real account). Basically, we can harness “peer” pressure to do good things with our money. I think this is a good idea, and in many ways it is one that we will use for our kids (though eventually, we won’t guard their savings from them).

    You have to come up with what works.

    1. Thanks, Hannah. The concept of peer pressure to do good things with money is a great idea that can only work if the taboo surrounding money-talk is eliminated. Another good reason to get rid of that taboo.

  5. Great story. I like the idea of a ‘No Touch Account.’ The approach I would take is to direct some of my savings into such an account, perhaps 75%, and the remaining 25% into a more traditional account. That way, guaranteed savings takes place and yet, there is still the opportunity to make use of another pot of money should the need/desire arise.

    1. I like that idea, James. It ensures that the majority of savings can’t be touched, and for people who have trouble building savings, the 25% gives an opportunity to work on it – without the risk of obliterating all savings.

    1. That’s what I’m hoping, Tonya – for myself as well as for Olyvia. The obstacles to touching the account force a habit of savings – which won’t need to be forced once the habit is set. Fingers crossed!

  6. This is a young person who should be the inspiration to many young people. A truly remarkable and inspiring individual. I love the “no touch account” idea. That’s basically what I do with most of my money. Instead of having a big chunk of my paycheck go to my savings or checking, they go directly to investments. I know it’s risky but it’s more of a calculated risk.

    1. That doesn’t sound too risky to me! Not nearly as risky as the cultural norm of spending on credit and living in debt. Investing is the key to early retirement. I wish you well, Allan, as you continue to go against the grain and build freedom into your future.

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