A few years ago, I saved over $12k in one year as part of a savings goal my husband and I had in anticipation of starting a family. Prior to that, I’d never saved even close to that amount so it was a big stretch for me…
Ultimately, we ended up hitting our savings goal plus a little more! It’s still one of the greatest things we ever did for our family.
I hope sharing the tips and strategies I found along the way are helpful to anyone currently saving for their own big goal.
First, let me start with a little backstory…
WHY WE DECIDED TO SAVE $12K
Our $12,500 savings goal came from a conversation my husband and I had when we were thinking about starting a family, where we shared our hopes and dreams for starting a family. Our hope was that I’d be able to stay home with our baby for a few years.
Thanks to my husband, we had a very clear idea of how we could potentially manage our finances once we had a baby – because he laid everything out in a spreadsheet to see how we could make it work. He wrote out how much we’d need to save beforehand and how we could adjust our future spending in order to make it possible for us to live off of his paycheck once a baby came.
This step was hugely important because it allowed us to figure out exactly how to make our dream a reality – and it helped us determine our goal savings amount.
We already had some money saved, and we realized from his spreadsheet that it would really be best if we had an extra $12,500 saved up before a baby came.
So that’s how we came up with the $12k savings goal… and here’s how we made it happen. 😉
Here are the 7 things that made the biggest impact on achieving our savings goal:
- HAVE A ***REALLY*** MOTIVATING “WHY”
This was probably one of, if not the most, important factor for me – I was 100% committed to this goal because it was super important to me. After all… I don’t think there’s anything quite like the prospect of being responsible for another human being to motivate a person to save more money. 😉
I had personal reasons for wanting to stay home with our son for his first few years, so my motivation was high for this savings goal. (And I hope it’s clear, but in case it isn’t, I 100% respect everyone’s personal view on the topic of staying home with a baby – my goal with this post is that you feel encouraged to pursue whatever is right for you. This just happened to be what felt right for my husband and I – so I wanted to share openly and honestly about that.)
Given that I really wanted to do everything possible to help make this a reality, failure didn’t feel like an option. The image of being home caring for our son was a huge motivator for me, and one that I really leaned on throughout that year of saving. Whenever I had a tough choice to make, I just imagined sitting in a rocking chair holding our baby – and it really helped to recommit to my goal.
If you’re saving for a big goal, I think the most powerful motivator is your deepest and most emotional reasons for saving that money. Those emotions are powerful, and I think getting really clear about what’s driving you is one of the most powerful things you can use to help you take the steps to save money and achieve your goal.
So, step one is to get clear on what you really, really want – because before you set a goal, you’re going to want something that’s truly worth working towards when the tough moments inevitably come. 😉
- CALCULATE YOUR MONTHLY SAVINGS GOAL
The next thing I did was calculate how much I’d need to save per month in order to hit our savings goal. I knew we wanted to meet our goal in about a year – so I divided our total savings goal ($12,500) by 12 months, which is about $1,041 that needed to be saved per month.
Next, knowing that amount was high for me based on my salary at the time – I thought of every single way I could find/earn money to reduce my monthly savings goal into an amount that was more realistic for me.
First, I took the amount I needed to save ($12,500) and thought about whether I had any money that I could use towards it. At the time we were actually working on a small bathroom remodel and I had about $1,500 saved up thinking we’d use it for new cabinets – but once I realized how much that would help us with our savings goal, I immediately decided to use the money towards our goal instead.
Next, I went through our whole house and looked for anything I could sell for a decent amount of money. (I posted things on Craigslist if it was at least ~$50, and posted anything I could sell on Ebay for ~$20/more.) We also had a yard sale at one point. Literally anything I could sell I probably considered or tried to sell during that year.
All of these steps helped bring in extra money (close to $2k) to help me reduce the monthly amount I’d need to save over the course of the year – so ultimately I actually needed to save about $10k/12 months… which came to about $830 per month to save. This still felt like a stretch… but it was much more doable – which was key!
So, to recap, calculate your monthly savings goal… and then if it seems unrealistic, do everything you can to find/earn money to lower it to a more realistic monthly savings goal.
- CREATE A MONTHLY BUDGET & USE A SYSTEM (I.E. YNAB) TO TRACK MONTHLY SPENDING
Next, I created a monthly budget. I wrote out my monthly income after taxes and then subtracted the $830 (amount to save per month from the previous step) from it. Then, I wrote down all the expenses that I had to pay with that money (groceries, household/toiletries, gas…) using an estimate of what I normally spent per month in each of those categories. (For this, I looked at my bank account and used the amount from the previous month as my estimate).
Next, I considered ways to spend less – basically, I looked at every single category of necessary spending in my budget to see if there was a way to lower it realistically – and I experimented to find what was realistic. One month I tried to trim our grocery budget a bit too far…. and well let’s just say that did not go well for us lol… so I adjusted it back up a little the next month.
One key thing that helped me stay on budget each month was having a little bit of “fun money” in my monthly budget. Even though it was only a small amount leftover after essentials and our monthly savings amount, it was something that I could look forward to using guilt-free since essentials and savings were already accounted for. This was key for me – it felt great to know that I’d always have at least some fun money to look forward to each month – even if it was just enough for lunch with my best friend and a few tiny extras that month. It would have been hard to save diligently each month and not treat myself at all – so I’d definitely encourage some type of ‘fun money’ line item in your budget, no matter how small.
Next – since at this point I had a pretty realistic budget set up – I looked for a system to help me track my spending throughout the month (to make sure I didn’t overspend and accidentally dip into my savings funds)… and this is where YNAB came in for me.
To be clear – I used YNAB because I think it’s great and truly helpful – but definitely find whatever works best for you if it’s not YNAB. There are other good options out there… I’ve just found that it’s super helpful to have some sort of system to *easily* track spending when you’re working towards a savings goal.
So, I set up my budget in YNAB and started tracking all my expenses in it. I started out by using YNAB’s free trial, but I pretty quickly realized how helpful it was to me (especially because I’m really visual and the app has a great layout for seeing your entire budget) so I pretty immediately converted to being a YNABer. It’s just so helpful to see everything laid out by category for the month!
Here’s a snapshot of a (fake) budget to give you an example of how YNAB looks:
- OPEN A *SEPARATE* SAVINGS ACCOUNT FOR YOUR SAVINGS GOAL
One important step I took to help us save $12k was I opened a separate savings account through our bank – and each month I transfered whatever amount I’d saved into that account.
This turned out to be great for two reasons –
- Every time I logged into my bank account (which was most mornings), I’d see that savings account with the amount that I’d saved so far… and this became really motivating as it went up over the months!
- It also made it harder for me to use any savings for non-savings spending because I would need to transfer money from my savings to checking account if I wanted to do that. If I ever felt tempted to use savings for something else (like something kind of frivolous), just the thought of having to go into the savings account I’d labeled “Our Baby/Stay Home Funds” would add tons of guilt. Plus, the extra step of having to transfer funds from one account to another would give me long enough pause to really check myself. Thankfully, I never ended up transferring money out of our savings account for any unnecessary purchases. 😉
(Just a quick note – if you’re someone who thinks they might feel tempted to transfer money from their savings to checking accounts if they were at the same bank, you could easily open a savings account through a separate bank in order to make it harder for you to dip into your savings. I’ve done this in the past – and it works really well!)
- REVIEW GOAL & BUDGET (YNAB) ***DAILY***
Even though my motivation for saving was huge, I think the process of looking at your goals each day in order to be more intentional is equally powerful. For me, I did this by reviewing my goal and budget each day – which all together took less than 5 minutes each morning.
Even with the best intentions and tons of motivation, saving for a large goal takes doing something day after day that you haven’t necessarily done before (at least this was the case for me) – so I really found it helpful to have a visual daily reminder to help me stay intentional and focused on why I was saving so hard.
I talked about it here in this post more, but every morning I would check my budget in YNAB on my laptop while having my morning coffee. This step alone was huge because it helped remind me how much I had left in each category for the month – and that in turn helped to pre-emptively reign in my desire for any big/unnecessary purchases later that day/month.
Aside from looking at my budget each day, I also quickly looked at my goal each morning.
Since I’m really visual, I had my goal written out on a piece of paper below a screenshot of my online savings account with the amount of $12,500 written in as the balance. I know this sounds pretty cheesy… and it probably is 😉 … but more importantly, it helped motivate me each day. (And I can’t remember, but I think I got this idea from the great story about Jim Carrey writing himself a check before he became successful.)
It may seem a little silly, but I did genuinely get excited looking at that (fake) bank account balance and seeing my goal written out because for a moment I could totally imagine how great it would feel to achieve it… and I could imagine the sense of security and peace I’d feel.
Each day, it took maybe 2 minutes to read my goal and look at that picture, plus another 2 minutes to look at my budget in YNAB right afterwards – and this really got me in that headspace I needed to stay on track each day! (And I just kept my goal & pic in my daily planner so I’d be prompted to take a quick look at it each morning when I opened my planner.)
Doing this helped me be more intentional throughout the day. It was way easier to avoid small in-the-moment purchases like snacks or drinks at the store before my train-ride home after work. Ultimately, it helped me make lots of tiny and larger decisions (that at the time often felt inconsequential) but that added all together over the course of about a year, actually did make a big difference.
It also made me look at every dollar differently.
When I got any type of unexpected money (I got a bonus at work, and we got a refund at one point), my first thought was how we could use most/all of it towards savings since our goal was top of mind each day. I definitely don’t think this would have been my first thought if I didn’t actively look at my goal and budget each morning.
So, to recap, find a way to remind yourself of your goal each day. It could be anything – a picture of your goal, your goal written out, a screensaver on your phone or computer, a necklace with a word that reminds you of your goal … there’s lots of different ways to do this.
- EVALUATE SPENDING AT THE END OF EACH MONTH
At the end of each month I went through my budget in YNAB and made sure everything looked good to close out the month. I made sure I didn’t overspend in any category, and if I did, I made sure I pulled in money from another category to cover it.
I also looked at how much I’d spent in each category and did a quick mental check of where I did well and where I could have done better – and I used this info to help me plan and do better the next month.
Then, I did the fun part and transferred the amount I’d saved that month into our savings account and took a second to enjoy looking at the new balance!
I also quickly looked ahead at the next month and either used the same budget as last month or made any small tweaks necessary in case I had any events like birthdays, etc. that I needed to plan for, plus any tweaks needed based on what I learned that month.
That’s it! I just repeated these steps for about a year and then….
- CELEBRATE!!! ✨✨✨
We actually ended up saving a little bit past our goal – and I remember the day when I saw the amount in our savings account that I’d been picturing for so long … it was such a great, proud, and happy moment!
Today, my son is 2 years old, and I’m still home with him and we’re all doing great. That money we saved up has given me inexplicable peace over the years, and we’ve continued to adapt and tweak our family’s budget/spending in order to make things work for us and our changing needs over time. I’m so glad we saved the amount we did, and that we were able to use that money towards something so meaningful to us.
To recap, here are the 7 steps I used to save:
I truly hope these ideas have been helpful to you & that they help you save a little more easily for what’s most important to you.
If you’d like to give YNAB a try for free for 34 days, you can use this link: https://confettiandsunshine.com/YNAB
Best wishes with all your savings goals!