A Solution to the Underwhelming Nature of Savings

Submitting my final loan payment two weeks ago is officially my biggest achievement with the smallest celebration. Selecting “Loan Payoff” felt cool, seeing that final amount was nice and making sure the full payment was in my account was good. But then I clicked “submit” and that was it.  No balloons fell from the ceiling, no celebratory gif on the screen, not even Kool & the Gang to cheer me on. It was just me and my screen, by myself at 6:30am with some peanut butter toast and a yogurt. Talk about underwhelming.

In contrast, the process of paying off debt was a ton of fun. Those who haven’t played the debt game will probably think I’m crazy, but winning at the debt game is an excellent time. There is so much strategy to it. You have to choose your repayment plan, how you pay, how often you pay and what loan to target. Each day while you are paying off debt is a challenge.

“What can I do today to add a little more snow to my snowball?”

Then you can create elaborate spreadsheets to track everything. SPREADSHEETS, FTW!

Now that I’m shifting into Save Mode, I struggled to find the game in it. There are no payment plans to strategize, I don’t get an extra bonus for direct debit, I suppose I could save as often as I want but there aren’t really any savings accounts to target.

Paying off debt was like running a race from the back of the pack. Every success felt like passing the next competitor as I got closer to the finish line. Saving feels like I’m the only one in the race. Don’t I win no matter what?

To combat my feelings of blah-ness, I have a plan. I think it’s a good plan. Feel free to steal it for your own savings adventures.

My plan?

*Ding!* Round Two!

I am going to save, in cash, the equivalent of my student loan debts. I will break it out by the 5 loans I originally had. To make it even more aggressive (because I love aggressive goals) I’m going to try to do it in less time than it took to pay off my loans. 459 days? LET’S GO FOR 458!

The Plan!

Savings Goals:

  1. $2,125 (Baby saver)
  2. $2,125 + $5,828 (Middle saver) = $7,953
  3. $7,953 + $8500 (Thing 1) = $16,453
  4. $16,453 + $8500 (Thing 2) = $24,953
  5. $24,953 + $20,377 (Big Momma) = 45,330

Timeline: July 12, 2016

I submitted my final student loan payment on March 27, 2015. I’m giving myself 2 weeks to breath, which brings us to April 10, 2015. 458 days from April 10 is July 12, 2016.

Potential Road Blocks:

1) What about the savings? To pay off my loans, I cashed out 2 savings accounts. The value of these accounts credited to my loans was $6,863 I don’t have any money stashed that I can magically deposit in my House Fund. This makes it more difficult.

2) What about the interest? My loans had an interest rate of 6.55% that chipped away at the value of my money. My savings account has an interest rate of 0.75%. That’s a swing of 7.3%.  This makes it a little easier.

3) What about your income? For 2 months of my student loans repayment, I was unemployed. Today, I have an income. Pending any disasters, I will have an income for the next 458 days. (and beyond!) My income is also greater now than it was last year. This makes it easier.

4) What about other savings goals? I save much more for retirement these days. I increased my 401k contribution by 10% and went from quarter maxing my Roth IRA to maxing that sucker. This is going to make saving for a house harder, especially because I still have urges to max my 401k. I know I’ll max that eventually, but hopefully it will be after this savings challenge is complete.

I also have a travel fund that needs to be funded, but it’s nearly full for my 2015 travel plans. Next year’s travel goal of Japan is different. That’s going to require a lot more cash. This is the great unknown. Worst case scenario, I can just charge the trip and deal with it later. I’m kidding!!

5) What about Hubs? For at least the first 9 months of my loan journey, Hubs didn’t help. These were my loans and I wanted to pay them back by myself. Then we wised up and realized that my loans helped both of us achieve a higher joint income. A higher income means more opportunity for both of us. Hooray! Hubs will be helping from Day 1 of this experiment. However, his income will be partially diverted to save for travel. This makes it a little easier.

6) What about reality? On paper, this plan doesn’t work. I have too much money being diverted, most notably to retirement. But, on paper my student loan payoff shouldn’t have worked either. I started with small goals when I paid back my loans. I want to go big from the beginning this time. I may get there, I may not but this goal will challenge me from day one.

It was fun the first time, it should be fun again.

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33 comments

  1. OK, that is a STELLAR idea. I am totally stealing it! I felt the same underwhelmed-ness after payoff (I think most people do) — loan repayment is such a high, partly because of the spreadsheets. Saving just isn’t as exciting. I do have some saving spreadsheets and they do help but this is better. 🙂

    1. *Tips Hat* I haven’t created any savings spreadsheets just yet. Interest rates are so sad right now, the compounding factor doesn’t add much excitement. It will be pretty awesome to see the interest build… even if it’s pennies at a time.

  2. Big congrats on your loan payoff and your savings plan! Hats off for setting such aggressive goals.

    If you can stomach market fluctuations, it might be worth putting your savings into a higher yield account like the bloggers’ perennially favorite Vanguard S&P index fund. We find that the gains help speed up our account growth, which helps us reach goals faster than with a <1% savings account. Makes the tracking more fun. 🙂

    1. Thank you, thank you!

      If our timeline was longer, this would totally be invested. I plan to need the money in just shy of 2 years and that felt way too short to bother with the market.

  3. What a cool idea. How clever 🙂 I might need to borrow it when I’m done with my debt. It’ll be so cool to see it in increments of your debt load.

  4. We’re so kindred spirits! I love this post and am glad I’m reading it 3 weeks before I make my last student loan payment. I like the way you’ve made it a game. To this point, I only planned on using a home-made coloring page of a house, and coloring it as my saving account filled up to my goal amount. I think I’ll still do that, but this allows me to play with spreadsheets…I’m always up for that!

    Thanks for sharing!

  5. My husband and I have one savings account where our spend on anything money goes. Within the account we divide up (on paper) his, mine and ours. After I make the deposit every month, I put the deposit receipt on his side of our table. He writes the amount on the paper accounting we keep and then announces what each sub-divided balance is. It’s fun to celebrate how much we each have. We have such simple pleasures.

  6. I think I need to treat savings more like a game. It’s hard right now because we’re saving up for a huge expense at the end of the year. So I’m stressed more than excited. Though I’ll be relieved when it’s all done.

    I did add a progress bar to my blog, hoping it’ll cheer me up to watch it inch toward the total we need. Maybe it’ll inspire me to find more ways to cinch the budget. Or it’ll make me hide under the covers. 50/50

    1. Have you tried savings goals in your actual savings accounts? Capital One 360 has them, with the little meter bar and everything. I reached one of my savings goals last week and now every time I log in I get a big green check mark on that account and a “Congrats! You’ve reached your savings goal” across the top of my account. Might be worth a shot!

  7. Funny, I think I’m the opposite! Love seeing my money grow. And now that we’ve racked up a CC balance during my partner’s unemployment and have to pay it off, it feels like a downer putting money towards killing it.

    1. Don’t get me wrong. I love seeing my savings grow, but I’m so used to the game of debt, my savings needed a little more oomph. Now that I’m in savings mode, going back to debt would be a serious buzz kill. Pay it off quick!

  8. What a great idea. I just paid off my wife’s car in less than 3 years by making extra payments. I was paying $1,250 a month. I’m gonna start paying this amount to my savings account each month.

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