So this Savings Challenge I do every year, well, since 2009 at least........I use the previous year's SC $ saved as an emergency fund for the following year.
IE-the money saved in 2012 was used to fund emergencies & irregular expenses in 2013 when regular income didn't cover everything.
Then at the end of following year, when all the emergencies that were going to take place had, I took whatever was left in that SC and put it into an interest bearing non-retirement account of some sort and it became "permanent". And hopefully when we retire it will be added to our sack o' money/retirement funds.
I started my personal Savings Challenge in 2009 when I was on a Yahoo group called "The Compact". I was younger and pretty naïve about how much I could save from our income then and challenged myself to put away 60 THOUSAND DOLLARS! Yes, 6 with 4 Zeroes after it. lolz
I didn't even get halfway there.
But you know what?
It didn't matter that I failed at my goal.
What mattered is that I saved something, right?!?
In 2009 I saved $23,865.36
We used $13,460.81 of that money in 2010 for unexpected expenses, sending the remaining $10,404.55 to permanent savings.
In 2010 I saved $34,019.88
We used $427.81 of that money in 2011, sending the remaining $33,592.07 to permanent savings.
In 2011 I saved $34,461.31
We used $2,627.16 of that money in 2012, sending the remaining $31,834.15 to permanent savings.
In 2012 I saved $28,907.08
We used $23,611.66 of that money in 2013, sending the remaining $5,295.42 to permanent savings.
In 2013 I saved $24,033.60
We used $0.00 of that money in 2014, sending the remaining $24,033.60 to permanent savings.
In 2014 I saved $27,427.06 and this will be the pot of money we draw from for any emergencies/irregular expenses in 2015, before sending whatever remains to permanent savings.
You can see from above that some years we had many unexpected expenses and most years we had few.....what we spent from the previous year's savings varied from $23,611.66 in 2012 to using $0 in 2014.
I am just thankful I DID save money because if there hadn't been that pot of money sitting in the bank in 2012, we would have had to delay or worse, put some of those expenses on a credit card!
So with 5 full years of my Savings Challenges(2009-2013) tucked away for our retirement years my total is sitting at $105,159.79.
But..........you knew there had to be a but somewhere, right?........Hubs got a generous Bonus in 2014 as well.
He gets a bonus most year's but last year's was waaaay awesomer.
We had 3 large irregular expenses last year--having our driveway re-asphalted, my road trip to the Midwest and oh yeah, we bought a new car in May.
Instead of funding these purchases with our 2013 Savings Challenge monies we used part of the bonus.
This means we didn't spend down any of the money saved in 2013's savings Challenge.
And after paying for these expenses with the bonus we still have $18+K leftover from that hunk of bonus money.
So I am adding it to what I saved in the 2014 Savings Challenge, which boosts our 2014 total saved to $46,193.93. 8-)))))))
Again when 2015 is over and everything is paid for, whatever is left from that $46+K will go into permanent savings for our retirement years.
Now I need to settle on a savings goal amount for 2015.
Since we actually saved $27+K in 2014(without the bonus $), I think I'll inch the bar up a bit to $28K for 2015.
$28K is very doable, given our income level. If I keep my frugal nose to the grindstone and no big expenses wallop us this year we should make that number.
We will have some extra expenses in 2015 with home repairs(getting things ready to sell in a couple of years) and the ever present car issues....plus 1 child still in college and dependent on us(IE $$$) and another child still on our medical insurance.
I plan to keep our living expenses as low as possible without having to go into "financial desperation mode". We won't be turning off the lights or heat or eating just rice and beans but we won't be splurging on lobster and filet mignon out at restaurants every night, lighting up the neighborhood like the Vegas strip or spending on extravagances like luxury goods and world cruises either.
So who wants to play along and save some of their income in 2015?
Figure out what you can reasonably live on and put the rest away for your retirement....or if you still have debt(and why do you still have debt at this point in your life?!?)put something extra this year toward that goal and get yourself DEBT-FREE and/or MORTGAGE-FREE.
Set whatever goal feels right for your life. Experts have said that people who set goals do better with their money overall. Set a goal to keep yourself accountable. Better yet, post a goal on your blog or in a community forum online and let other people's eyes help keep you more accountable. 8-)
Yah, it might not be fun to track your expenses but if you don't know where your money is going(and with most folks the money DOES GO!)how can you know if you keep any?
Tell us your savings goal for this year and how you plan to go about achieving that number.