Early in November, stuck at home with no power and no internet due to Hurricane Sandy, I started thinking seriously about my savings goals for the next year or so. I put together a very specific plan to help myself save up $25,000: enough for a year of travel and some money to come home to. While I didn’t take saving as seriously as I should have during the summer months, in November and December I made a lot of progress in the right direction, following the plan exactly in the hopes of reaching this goal by Jan 1, 2014.
As I shared in my last entry, it is working! I met my goals in both of the last two months and have started to master the tricks and develop the mentality I’ll need to keep doing so every month until my goal is met. Here are a few things I have learned about trying to save up a large sum of money in a relatively short time frame:
1. The last week of the month can be a budget buster. The beginning of the month is simple. All the budgets are full of funds and if you slip up and buy lunch when you should have brought it, it isn’t a big deal. The minimal credit card bill seems encouraging, but will it still look that way when the $400 you inevitably have to spend on bus tickets near the end of each month is added to it? Busting out of the gate with too much gusto early in the month can make the end of the month really hard. I did this in November and had to leave my credit cards at home for a week to make sure I didn’t add anything to them. I also had to pass up on a lunch with a friend and put off grocery shopping for a few days. But in the end, I kept my spending under the limit I set and met my savings goal. Still, lesson learned- ease into the month and distribute spending as evenly as possible!
2. Projecting helps. I have found that projecting the money that will go in and out of your accounts for the next three months helps to set an expectation for how much money will realistically be available to save (on top of the $500 I have automatically deducted every time I get paid). Knowing that an expense is coming up in the next month helps me understand when I should leave that extra $100 in checking and when it is safe to transfer it to savings. Obviously, money can always be transferred back to my checking account, but I am trying to hold tight to the promise I made to myself that once money enters savings it is not to come out!
3. It is really hard not to spend money on things you want. The trick is not to want things – not as much as you want to meet your goal, anyway. We Americans are consumers. Being raised in the U.S. almost inevitably means your brain has been tainted with the notion that your worth and level of success are directly related to how much stuff you have. I try to stay away from valuing myself in this way, passing up on a few of the gadgets people own and comforts they expect, instead opting for the more utilitarian or affordable version or just doing without. Still, I do get sucked in sometimes. However, I have found that wanting to take this trip first and foremost has made it easy to block out other temptations. When I remind myself that buying a sweater will realistically mean I can’t do or see something in Guatemala, I no longer want that sweater. Continuously putting my dream ahead of everything else, means my money magically stays in my pocket!
4. Saving gets easier with time and positive results. As with lots of things in life, the more you do them, the easier they get. Now that I have broken the habit of buying lunch at work, and don’t feel as many urges to go shopping for things I don’t need, it is getting easier to keep doing it. I am forming new habits and becoming accustomed to getting pleasure out of saving money instead of spending it- it has become a high stakes game to me. Since winning means a steadily growing savings account, the results encourage me to keep it up!
I still have a ways to go before I meet my goal, but I am finally on the right track. I am more motivated than ever to hit and even exceed $25,000 so that I can also meet my newest goal of paying down some student debt. Challenges still remain, and unexpected costs will certainly arise, but it definitely feels good to be taking charge of what I can.