Savings Goals

Many months ago (June 2009), my wife and I set a goal for the amount of money we wanted to save. We wanted to save enough for a down payment on a modest house by May 1, 2010. Since then our plans for that money has changed somewhat, but the dollar amount and date of the goal has remained the same.

To help us track the goal, we made a Google Doc that listed all of our accounts and our goal. We included all of our stock and IRA accounts, our checking/savings accounts, cash we have in the house, our credit cards, my PayPal account, and a Walmart gift card that we keep funded for using at Sam’s Club. We left off Becca’s student loans (the only debt that we have) because we don’t have to start paying them back until Becca finishes school in ~5 years and the amount is relatively small as far as student loans go. Perhaps we’ll add them to the spreadsheet in the future.

Anyways, I set up a few formulas in the document to automatically calculate how many days were left before May 1, how much we needed to save per day and month, how close we were to reaching our goal (%) and to add up our accounts for us. Every couple weeks when we reconcile all of our accounts, we take a minute to punch the numbers into the spreadsheet to see how we are doing.

Overall, we did a good job of growing our savings at a pretty consistent rate. We made some good decisions, such as investing a good chunk in the stock market (mutual funds) near the bottom of the crash (which has grown by about 30% over the past year!) and setting up automatic savings plans with SmartyPig and ING Direct. For the past few months, however, it looked liked we were starting to spend faster than we were saving. We were traveling and buying gifts for the holidays, my wife applied to grad schools (expensive!!) and then bought plane tickets to visit them, I renewed a bunch of domain names and paid business taxes and registered agent fees, etc etc. It looked pretty bad.

But then suddenly we got a big tax refund (which was unexpected because I strive to get $0 back at the end of the year, and normally I have to pay quarterly payments to accomplish this), Becca was reimbursed for some of her grad school traveling, my home business revenue picked up, and the stock market made another minor leap. Suddenly we went from being at 96.4% of our goal on 3/1 to a whopping 109.66% of our goal on 3/19! We are both so excited to have not only reached our goal 42 days ahead of schedule, but also to have beaten the goal by over 9%!

To help keep us saving, we have a little more than doubled our original goal and reset the goal date to May 1, 2011. We are confident that we can meet the goal while maintaining our current lifestyle, so with a little luck we’ll hit the goal early and be able to up it again.

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