Saving inspiration stories?

ishtarishtar Posts: 1,006Member, Beta Tester
edited May 2010 in Personal Finance
I thought I posted this earlier, but didn't see it when I went back. Must have hit a wrong button. If you see this twice, sorry.

Here's where I stand right now:

1. Buffer - one paycheck ahead. On my May 5th paycheck, I'll be able to finish budgeting out May completely, and any other income this month is "available next month."

2. Rainy Day funds - (I suppose this is the new Rule 2, right?) I've got my daughter's black belt test in October funded a little over estimated cost. I've got $410 set aside for summer when my tutoring income usually declines. I hope that I won't need it and can roll it into the Buffer, but I feel better with it there for now. Other categories have very tiny amounts in them.

3. Efund is at around $200.

I've always had trouble growing savings. I'm looking for stories where people started saving small and it grew. The problem is psychological and I'm trying to retrain my brain. Patzer's fabulous post on Letting Money Sit really hit me, and I keep rereading it.

I'm a single parent making under $30k/yr from 3 income sources. Somehow stories of people making $100k that decide that they could live without {service/item I couldn't possibly hope to afford anyway} and saved thousands doesn't really help me. But I'd really love to hear some stories from people that started saving really small and were able to make it grow. $1/day, $5/wk, $50/mo - that kind of thing.

See, right now, my subconscious is trying to wipe out that tiny efund by saying it's so small, it won't really make a difference anyway. And I'm trying to fight it. The Rainy Day categories were funded by my tax refund, not by building them small. And I love seeing that sit there. But the baby efund needs to grow. And other Rainy Day categories need to grow.

So, if you have a story about starting really small and handling something or growing it big, I'd really love to hear it.

Thanks!

Ishtar
Post edited by Unknown User on

Comments

  • rollercoasterrollercoaster Posts: 429Member
    Mine isn't a story of starting small and growing big...yet. It started at zero as of January 1, 2010 and has grown just a teeny little bit.

    We have decided that we want to take the kids to DisneyWorld for their 10th birthdays (should be 9th to get the kids rates!! 8) but, oh well) and DD will be turning 10 in August 2012. Right now we don't have the spare funds to put into this travel category as we concentrate on living within the confines of a budget, make house repairs and snowball debt, but we earn interest and debit card usage rebates on our checking accounts. I started YNAB January 1 of this year, and categorize the checking account interest and rebates to Disney 2012. I've designated this category as non-whackable when it comes to whack-a-mole and right now we have $25.43 for our trip.

    I know it's not much, but it's a visible goal that I see growing every month and can see every time I look at my budget in YNAB. As we learn to let more money sit, the interest deposits will grow so the category balance will grow that much faster. The power of compounding working to help us take a family vacation. Of course it won't happen only on interest and debit card rebates by 2012 and we will need add more direct funds... after the debts have been snowballed into oblivion.
  • ishtarishtar Posts: 1,006Member, Beta Tester
    mapster wrote:
    I started YNAB January 1 of this year, and categorize the checking account interest and rebates to Disney 2012. I've designated this category as non-whackable when it comes to whack-a-mole and right now we have $25.43 for our trip.

    I know it's not much, but it's a visible goal that I see growing every month and can see every time I look at my budget in YNAB. As we learn to let more money sit, the interest deposits will grow so the category balance will grow that much faster. The power of compounding working to help us take a family vacation. Of course it won't happen only on interest and debit card rebates by 2012 and we will need add more direct funds... after the debts have been snowballed into oblivion.

    Great!

    Right now I'm putting 1% of net income in the efund. That's pretty small; about $25/mo. Starting this month, I'm trying to put 50% of my tutoring income in there, too, trying to live more on my day job than my extra tutoring.

    I've always counted my checking interest as "income available NOW" because . . . well, I don't really know why. Because I needed it? but it's less than a dime a month, so didn't feel like it meant anything.

    Hmmm, maybe sending that to savings will help, too.

    Thanks!

    Ishtar
  • rollercoasterrollercoaster Posts: 429Member
    ishtar wrote:
    I've always counted my checking interest as "income available NOW" because . . . well, I don't really know why. Because I needed it? but it's less than a dime a month, so didn't feel like it meant anything.

    Hmmm, maybe sending that to savings will help, too.

    Thanks!

    Ishtar

    It's amazing how quickly those little bits do add up. I'm not even sure how I came to the decision to use those miniscule deposits for this purpose, but it seems to be working.
  • bookman413bookman413 Posts: 1,442Member, Beta Tester
    edited May 2010
    I'm not a single parent and I make slightly more than you do. Even so, I hope there's something useful in my story.

    I don't have an inspiring story about savings, other than I did manage to pull myself out of about $9,000 of credit card debt (held at low interest rates, but still, $7,000) in the last year and a half on the equivalent of a $35,000 before-t.ax income. The $500 a month I was devoting to debt repayment has now been converted into my normal monthly savings line in my budget--This is the amount I put away in savings no matter what, the same as when I was paying off by credit card debt. I also have a category for "extra savings", which is where I put extra income and savings from getting good deals on things or category money for categories that have topped off (as an example, I will top off my medical insurance copay fund at $5000, or the worst case-scenario of two years of full medical copays in a row. Once that amount is in there, most of the $166 a month I send to it will go to "extra savings". As another example, I am planning on getting cheaper internet access once my current contract expires and part of the money I will save on that will go into the "extra savings" category from now on . Also, I can often afford to put "extra" paychecks (when I get paid 5 times instead of 4 in a month) in the "extra savings" category.)

    Once you have a buffer of at least 2 paychecks built up to give you some breathing room in terms of timing for paying bills and other expenses, I think, in terms of retraining yourself, especially if you only have relatively small amounts every month to put aside as savings, that one of the best first steps is to throw money "over the wall" every month by budgeting a strict and constant monthly savings amount and have it transferred out of your checking account into a separate, off budget, savings account so it's less accessible. (I use SmartyPig because I earn slightly more than 2% there). This is very similar to the concept of paying off debt; you make a monthly payment, as if it were a bill, and that amount "disappears" from your finances or at least your checkbook. Don't make the amount so high that your checking account barely stays level every month; let maybe $100 or $200 a month extra build up in your checking account as well.

    This isn't quite the same as Patzer's "learning to let money sit",because in a sense when you throw this money over the wall you are hiding it from yourself, which is different than what Patzer is talking about. But getting used to putting *some* amount truly aside where it's not readily accessible, and not immediately visible from your budget page, is a good thing to do at first. As you get used to that, you'll also get used to a slowly growing checking account balance, which will slowly get you used to letting money sit fallow.

    And some months later from now, you'll look at your off-budget savings account and be surprised how much money you've built up.
    Post edited by bookman413 on
  • bookman413bookman413 Posts: 1,442Member, Beta Tester
    ishtar wrote:

    I've always had trouble growing savings. I'm looking for stories where people started saving small and it grew. The problem is psychological and I'm trying to retrain my brain. Patzer's fabulous post on Letting Money Sit really hit me, and I keep rereading it.

    I think now that you have fantastic tool of YNAB, you'll find that it wasn't a personal failing or inability to save, but lack of effective budgeting tools in the past that made it hard for you to save.

    With YNAB (or any zero-based budgeting system for that matter), you have a tool that allows you to identify and effectively cordon off small amounts of money from your budget over time and let them grow, rather than having them disappear into a larger pool of money and disappear when you unwittingly spend them on either everyday or frivolous things. .
  • ishtarishtar Posts: 1,006Member, Beta Tester
    bookman413 wrote:
    I think now that you have fantastic tool of YNAB, you'll find that it wasn't a personal failing or inability to save, but lack of effective budgeting tools in the past that made it hard for you to save.

    :oops:

    Nope, really is personal failing. There's a lot of back-story I didn't go into. Been using YNAB quite awhile.

    Ishtar
  • ishtarishtar Posts: 1,006Member, Beta Tester
    Please, keep more stories coming!

    I know there must be people who started off saving tiny bits that were able to make it grow. Aren't there?

    Ishtar
  • amphoraamphora Posts: 38Member
    2 years ago I saved almost $2,000 for Christmas gifts by saving $75 a paycheck. Had it pulled out automatically by ING each paydate. I never even saw it.

    Of course, I haven't managed to do that since, instead running up my credit card, (you don't have to tell me about personal failing!) but it was really great to pay for gifts and not think twice about it. So it can be done! You just have to be committed and stay on budget.
  • ishtarishtar Posts: 1,006Member, Beta Tester
    Amphora, that's cool! Thanks!

    I think I actually find as much or more hope in your signature block, though:
    Buffer start: $25, now: $213.82, goal: $2,280
    Re-invest start: $857, now: $857, goal: $17,000
    Car start: 0, now: 0, goal: $10,000
    Fun start: $2758, now: $2758, goal: $48,000

    Thanks!

    Ishtar
  • starylastaryla Posts: 258Member
    I feel your pain Ishtar! I enjoy reading the blog 'The Simple Dollar' and his post today was in regards to his goal to cut his monthly entertainment budget by half this year. For him this means cutting it from $250/month to $125/month! Since my 'fun money' for this month equals the grand sum of $15 dollars (still leaving this category $30 negative from rollover last month) this does not seem particularly inspiring to me. Rather it just made me feel pretty crappy about my situation.

    I wish I had an inspiring story to tell...let me think. Over a year ago I decided that I REALLY needed to start a Roth IRA. I started out by having $20/paycheck automatically allotted into an ING savings account. When I got a small raise and we paid off a bit of debt I doubled that to $40 / paycheck. I'd like to open a Vanguard account and their minimum investment is $1000. My account balance has grown to over $800 so I will be able to open an IRA within the next few months. I should also be getting another small raise and I plan on upping my automatic allotment to $50 / paycheck. This will equal $100 / month which coincidentally is the minimum contribution required after the Roth opens. I'm looking forward to being able to make monthly contributions to an IRA!
  • ishtarishtar Posts: 1,006Member, Beta Tester
    staryla wrote:
    I
    I wish I had an inspiring story to tell...let me think. Over a year ago I decided that I REALLY needed to start a Roth IRA. I started out by having $20/paycheck automatically allotted into an ING savings account. When I got a small raise and we paid off a bit of debt I doubled that to $40 / paycheck. I'd like to open a Vanguard account and their minimum investment is $1000. My account balance has grown to over $800 so I will be able to open an IRA within the next few months. I should also be getting another small raise and I plan on upping my automatic allotment to $50 / paycheck. This will equal $100 / month which coincidentally is the minimum contribution required after the Roth opens. I'm looking forward to being able to make monthly contributions to an IRA!

    Staryla, that's fantastic!

    Thank you,

    Ishtar
  • AmbarAmbar Posts: 205Member
    I'm at the point where I'm focused on debt reduction rather than savings (although, as one creative person -- I forget who -- posted, debt reduction really is savings, it's just that you're filling in a hole rather than growing a pile, at first. 8) ) I'm kind of ouchy about the fact that it's going to be over a year before I get the first of my accounts paid off (I'm going by interest rate rather than absolute size), but I'm using the following trick to stay motivated:

    I think a useful trick from the psychological point of view is to catch the voices which say negative things ("that will never amount to anything" "you're wasting your time" "ooh, saved a grand total of thirty-eight cents there, after a year you can buy a latte") and kick their little tails, rather than allowing them free rent in your head. Pick whatever you think is a snappy comeback ("Rome wasn't built in a day" "it's progress in the right direction" "Practicing savings is useful regardless of how *much* I'm saving"). Or, visualize rolling up a newspaper and whacking them all over the room. Whatever works. :lol:
  • MalisaMalisa Posts: 6,140Member, Moderator, YNAB Team, Beta Tester
    Ambar wrote:
    Or, visualize rolling up a newspaper and whacking them all over the room. Whatever works. :lol:


    :lol: :D
  • katsjackkatsjack Posts: 13Member
    Mine isn't very inspirational - I haven't saved much money yet, this is just how I do it. There is either 59 cents or 61 cents each month that I can put toward savings (depends on the rounding of Taxes.) Then I also put the interest I earn each month into my savings category. The last thing I do each month to scrape together a few dollars for savings is this - all of the categories that have carryforward amounts I round them down to the next dollar. So if I have $17.83 left in groceries, I subtract 83 cents from the budgeted amount leaving $17 to carry over to the next month and 83 cents goes into savings. I can usually get about an extra $5 each month doing that. It makes it prettier to not have all those cents clogging up my column and I get a little extra in savings. Sixty-one cents is not a lot, but by the end of the month I can turn that into about $35 or $40 depending on how much interest I earn and how many categories are cents-less.
  • ishtarishtar Posts: 1,006Member, Beta Tester
    katsjack wrote:
    Mine isn't very inspirational - I haven't saved much money yet, this is just how I do it. There is either 59 cents or 61 cents each month that I can put toward savings (depends on the rounding of Taxes.) Then I also put the interest I earn each month into my savings category. The last thing I do each month to scrape together a few dollars for savings is this - all of the categories that have carryforward amounts I round them down to the next dollar. So if I have $17.83 left in groceries, I subtract 83 cents from the budgeted amount leaving $17 to carry over to the next month and 83 cents goes into savings. I can usually get about an extra $5 each month doing that. It makes it prettier to not have all those cents clogging up my column and I get a little extra in savings. Sixty-one cents is not a lot, but by the end of the month I can turn that into about $35 or $40 depending on how much interest I earn and how many categories are cents-less.


    Thank you!

    I might be able to do a little of that.

    Ishtar
  • PatzerPatzer Posts: 3,794Member, Beta Tester
    I kept thinking that what I have would be non-inspirational at Ishtar's level. Then I talked to my daughter the other week.

    Daughter is working part time at Burger King. It doesn't support her, but it eases how much I need to pay to support her. She is paid weekly. For a long time, that meant she had money on Friday morning and was broke by Monday. We had talked about this and how she needs to learn to let money sit in order to be able to do anything that doesn't fit in one paycheck.

    Fast forward a few months, and now she has learned how to let money sit well enough that she can feed herself all week long. Granted, her choices of *how* to feed herself aren't as economical as I might hope; but it is progress that she has learned how to make a week's pay last a week. She is trying to put a dab into the bank; I don't have visibility into how successful she is being.

    What I do know is that when she came up on her one year anniversary with BK, they gave her paperwork for the 401(k). She came and asked me whether she should put in 10% or 15%. I swallowed hard, and advised her to put in 10%. The investments look plain vanilla, the company match is small (10% of whatever the employee puts in, but it can go up or down with company profitability), and there is no real choice on how the funds are invested. The tax "benefit" to daughter will be small to nonexistent this year, as her income is so low that she might not have a federal tax liability at all.

    But still, that's a small amount of money per week that goes to a place where it will sit untouched in spite of the attractions of new computer hardware or using the for-pay GPS service on her cell phone. That's progress.

    Patzer
  • ishtarishtar Posts: 1,006Member, Beta Tester
    Patzer, knowing all the struggles you've had with your daughter over the years, that's wonderful!

    I think it's fantastic that she is going to use th 401k at all, and that she came to you for advice about it. I remember when she was bouncing stuff all over the place.

    Thanks!

    It's funny, but all the personal finance books I've read, all the struggles I've had, and playing w/ YNAB for almost 2 years, it really was your post that I go back and read and think about. So, thanks for the Letting Money Sit post. :)

    Ishtar
  • llambellambe Posts: 528Member
    I think the "hard to let money sit" and "it's not enough to matter" kinds of thoughts can happen no matter the amount of money involved - at least I've had them enough no matter the level of my income :lol:

    Others have suggested most of the "hacks" I've used to deal with those thoughts (variations on hide the money & talk back to self) but really when it comes down to it the "importance" in MY mind of what I've trying to save for makes the biggest difference. Once I had YNAB to make my choices more "in my face", paying off the CC (renovation cost that was "supposed" to be paid off from the proceeds of selling our previous house <i.e. stupid tax :roll:> ) and saving for our recent adoption ( Hurrah!!!!), were easy (relatively speaking :lol: ) because I "fought" the negative thoughts harder and I fought for the extra nickles and dimes ( and dollars) to throw there.

    However, I also have issues with building up an EF. In fact even putting "EF" in a category name seems to drop it's priority in my mind :cry: However based on some of the HUGE changes I've made over the last few years since finding YNAB (that seemed impossible at the time), I expect that as long as I keep pushing at it I'll find a way to change this mindset too. In fact my plan is to "nickle and dime" myself into a new mindset so to speak :lol:

    In the meantime, based on this thread I went ahead and created an EF category (yet again) and I put April's interest in there :D

    LL
  • rollercoasterrollercoaster Posts: 429Member
    katsjack wrote:
    Mine isn't very inspirational - I haven't saved much money yet, this is just how I do it. There is either 59 cents or 61 cents each month that I can put toward savings (depends on the rounding of Taxes.) Then I also put the interest I earn each month into my savings category. The last thing I do each month to scrape together a few dollars for savings is this - all of the categories that have carryforward amounts I round them down to the next dollar. So if I have $17.83 left in groceries, I subtract 83 cents from the budgeted amount leaving $17 to carry over to the next month and 83 cents goes into savings. I can usually get about an extra $5 each month doing that. It makes it prettier to not have all those cents clogging up my column and I get a little extra in savings. Sixty-one cents is not a lot, but by the end of the month I can turn that into about $35 or $40 depending on how much interest I earn and how many categories are cents-less.

    I like this "rounding" idea, too and might have to steal it to go along with the interest and debit card rebates. I used to use this method as a sort of mini-buffer in the checking account back about 5 or 6 years ago, transferring to savings every couple of months when it got built up. I'd keep track of all transactions in a notebook, round up for outflows and down for inflows to the nearest dollar. Then BofA 'stole' MY :lol: idea and probably made a killing on the "keep the change" program. I'm not even sure why I got away from doing that, but I think I may try to start it up again. Maybe not for every transaction - can you imagine all the splits in the register :shock: - but swiping from each category when zeroing out the end of month could work.
Sign In or Register to comment.