It’s no secret that Brian and I have been saving money forever towards our epic quest to travel the world. In fact, this time last year I wrote a 2010 year-end savings status in which I chronicled our money savings efforts throughout the year. At that time, we’d saved almost 56% of our $60,000 savings goal.
So, what does our savings status look like one year later?
Well, we had a crazy year financially, mostly because we sold our house at a loss and ponied up $10,819 at the close of the sale. That set our savings back a bit and we watched our original departure date of January 2012 slip away. We needed more time to save to make up for the loss.
Once we sold our house, though, we moved into an apartment where rent is $500 less per month than what our mortgage was. That extra money went straight into our savings account of course. Then Brian got promoted, and that additional money also went straight into savings.
All of the things I wrote in my post one year ago are still true. My biggest thrill is still transferring money into our savings account. I still make up various savings scenarios in my head and then calculate what we’d need to save in a given month to make them come true. You could say that saving money is a bit of an obsession of mine. That’s because traveling the world is my dream and I know the easiest way to make my dream come true is to save, save, save.
Here’s our savings status after two full years of saving money:
As of January 1, 2011 Brian and I had saved 56% of our savings goal.
As of January 1, 2012, we’ve saved (drum roll please….) 91.09% of our savings goal, even with the hit we took on our house. Yay!!
We’re on track to meet our $60,000 savings goal by the end of February. Since we’re not leaving until mid-May, it looks like we’ll actually save more than our goal. In fact, we’ve set a new goal of $70,000 which we should be able to meet with a little hard work.
I know that saving $20,000 or $30,000 a year isn’t realistic for everyone. Saving money is hard work, whether you’re able to put away $2,000 or $20. So, below are a few things I’ve learned about saving money no matter your savings goal.
*Bonus* Money Saving Tips Anyone Can Use
Tip 1: Know what you’re saving for.
Brian and I didn’t get serious about saving until we clearly identified our goal: quitting our jobs to travel the world. Once we had that end-goal in mind saving became much easier.
You can’t reach your destination if you don’t know where you’re going so identify in detail what you want to do. Whether it’s buying a home, remodeling your kitchen, saving for your child’s education, or traveling the world, once you know what you’re saving for saving becomes a lot easier.
Tip 2: Set baby-step goals.
When we set a savings goal of $60,000 it seems like an impossible number (at the time we had about $9,000 in our savings account). In order to make our goal more palpable, I created a savings spreadsheet in Excel. I put our savings goal in big, bold numbers at the very top and then, next to that number, I auto-populated a cell with our percentage saved. Each time we saved money, even $10, the cell would update and show the % we’d saved towards our goal. Sometimes the number would only go up 0.01% but watching our progress in percentages made every dollar saved feel like a little victory. Baby steps count and they’ll eventually take you very far.
Tip 3: Do not remove money from your savings account. Ever. Instead, create an “oh shit” fund.
The money that Brian and I have in our savings account is untouchable. We haven’t removed a single cent of it since we started saving. If we’d considered that money accessible to spend on plane tickets or new shoes we’d never have reached our goal. Put money in your savings account and do not take it out.
For minor emergencies like car repair or unexpected medical bills (which we had this year when Brian broke his collarbone) we created an “oh shit” account. We put $200 a month in this account. Sometimes we need to use the money and sometimes we don’t. The important thing is that we have a very small well of money to draw from when we need it and that prevents us from dipping into our savings account when we need cash. For the record, we have done this for years, even when we made little more than minimum wage. Back then, it was a way to avoid using our credit cards, and it worked.
Tip 4: Save the small stuff
Grandma sends you a $10 check? Save it. You find a $20 bill on the ground? Save it. Save your raise, your change, and the $3 left in your bank account before payday. It adds up, I swear.
Tip 5: Order your foreign currency online
Once you have done all the saving you can, make sure you get the most out of your money by ordering your foreign currency online. The exchange rates are better than at the bank or airport.
Tip 6: Sorry, but you can’t do everything you want to do and save a bunch of money
We didn’t go home for Christmas this year because plane tickets were through the roof and we didn’t travel to our favorite home-away-from-home to celebrate New Year’s with our friends because we couldn’t justify the expense. There’s no sugar-coating it, it sucked to miss those things.
Saving a lot of money takes sacrifice. You might not be able to get the new iPhone. You might have to wear your old scuffed up shoes instead of buying new ones. So what? In the end it’s those sacrifices that allow you to save the money needed to recognize your dream.
It’s about priorities so put your dream your first.