It took 458 days to pay off my student loans. I celebrated for 2 weeks and took a breather. Since then, I’ve been saving. As of July 10, I’ve been saving for 458 days.
July 10th marked the end of my saving experiment, Round 2. I paid off a lot of debt during Round 1. I wanted to see what I could save during Round 2. The experiment is up. It is time to see how far I came. Could I save the equivalent of my student loans in the same period of time?
Short Answer: No.
I knew I was going to face challenges with Round 2. As I wrote when I set out the experiment, the numbers didn’t work on paper. In Round 1, I only had one goal: Kill the debt. In Round 2, my money was going all over the place.
While I didn’t reach my goal, I got awfully close. I also learned a few things along the way. Gather ’round.
Let me tell you about my savings.
When I typically think of saving, my brain defaults to fixed savings amounts. Save $458/month and you can max out your IRA. Save $1500/month and you can max out your 401k! For certain savings goals, fixed amounts work. Set it and forget it. But what about stretch savings goals? What about saving when life gets in the way?
I knew I couldn’t commit to $x per month with my savings goal. I didn’t want to. I wanted to commit to whatever was left over, while maximizing what was left to save.
Here is a chart of what I was able to save each paycheck. You can see that there is nothing flat about this line, though it does bounce around the same numbers.
I set up my paycheck allocation to cover my fixed expenses with the first check of the month and variable expenses the second check. The dips are from the fixed costs and the peaks are from the variable expenses. Hubs is is an hourly employee, so some months were better than others.
There were no unexpected windfalls.
I get an annual bonus. Can you guess when that hit my accounts? Other than this one time windfall, we did not come into any money during the saving experiment. I would have loved to come into money, but we took what we could get.
I don’t like relying or expecting windfalls to save, especially unquantifiable amounts. It feels like whenever you see money coming your way, it is so easy to spend it a few times in different places, even if that is saving!
I kept going even when I knew wasn’t going to get there.
I knew when I started this savings experiment that I probably wasn’t going to make it to my savings goal. I wanted to save what I paid off in my student loans in the same amount of time. If you zoom out from the House Fund, I did that. I’ve saved a lot for retirement. But the House Fund didn’t get to where I wanted it to go.
Below is my progress over the last 458 days.
- The Blue Line is what I needed to save to meet my goal.
- The Red Line is what I actually saved
I was ahead of schedule for exactly 1 paycheck. Then the trend was clear; I wasn’t going to make it. Every months I slipped a little further below the blue line. I accurately predicted my only windfall during the year. With all that, I kept saving and I kept pushing myself.
Overall, I’m thankful I conducted this experiment. I saved a lot. It was way more that I could or would have saved otherwise. In the back of my head, I was constantly reminded of my obligation to Round 2 and that kept me motivated.
Hopefully, I can get to the full $45k before we buy a house!
Have you tracked your saving?