Friday, July 10, 2015

The Yearly Savings Challenge & How It Has Helped Me Save $

Ok, so I've talked before about how I utilize the Savings Challenge monies I tuck away each year.

I save and save in one year and then, in the following year, if we have any bills/costs not covered by our regular yearly income, we use that previous year's savings to apply toward the following year's costs.  At the end of the following year, anything left in the previous years Savings Challenge gets put into an investment account and becomes "permanent savings".

Basically we use last year's savings as our emergency fund to pay for any current year's costs we can't cover with the current year's regular pay.

I've been doing this since 2009 and it seems to be working out quite well for us.

In 2009 we saved $23,865.36.
In 2010 we spent $13,460.81 of that 2009 money on various expenses(a used car purchase, a new fridge and a couple of vacations).
At the end of 2010 we had $10,404.55 leftover of the 2009 money and it got tucked away to permanent savings.

In 2010 we saved $34,019.88.
In 2011 we spent only $427.81 of that 2010 money toward a quick trip to OC.
At the end 2011 we had $33,592.07 leftover of the 2010 money and it got added to the 2009 "leftovers" for a grand total of $43,996.62 tucked away to permanent savings.

In 2011 we saved $34,461.31.
In 2012 we spent $2,627.16 of that 2011 money toward a used car purchase and 2 mini-vacation trips.
At the end of 2012 we had $31,834.15 leftover of the 2011 money and it got added to the 2009 & 2010 "leftovers" for a grand total of $75,830.77 tucked away to permanent savings.

In 2012 we saved $28,907.08.
In 2013 we spent 23,611.66 of that 2012 money toward a rebuilt car engine, home renovations/repairs and supplies, a road trip to the Midwest and a new/replacement HVAC system for our house(the last item accounted for about half of all that spending).
At the end of 2013 we had $5,295.42 leftover of the 2012 money and it got added to the 2009-2011 "leftovers" for a grand total of $81,126.19 tucked away to permanent savings.

In 2013 we saved $24,033.60.
In 2014 we spent ZERO of that 2013 money.  Up until 2014 any bonuses Hubs received at work were directly dumped into our kid's college funds account.  The 2013 Bonus was when we finished funding the college account, so we could apply the 2014 Bonus toward expenses we couldn't cover with the regular income in 2014.  This meant the 2013 Savings Challenge monies didn't have to be touched as long as the 2014 Bonus could cover any out of the ordinary expenses that year.
At the end of 2014 we had the whole $24,033.60 leftover of the 2013 money and it got added to the 2009-2012 "leftovers" for a grand total of $105,159.79 tucked away to permanent savings.

In 2014 we saved $46, 193.93(a chunk of which was leftover Bonus money we didn't spend in 2014 since we had finished funding the college account).

Hubs got a Bonus this year and after buying a new used car we still have approx. $14K left to cover a bathroom redo in 2015.  If we don't need to touch the 2014 savings in 2015, at the end of 2015 we could have tucked away to permanent savings(when added to the 2009-2013 "leftovers") an incredible $151,353.72.

If we keep trending along this path, by the time Hubs retires in 2+ years(and if he receives a Bonus in the next 2 years similar to what he received in 2015)we could have an additional  $211K saved for retirement in addition to everything we have been putting away all these years into the actual retirement accounts.

If you had asked me when I started this scheme in 2009 if I'd be able to save this kind of cash I would have laughed in your face.

This just proves that by putting small amounts of money away, over time, you can achieve a financial goal.
I know many are not in the position to save tens of thousands of cash a year but you CAN save something no matter how much your income is a year.
The point is to JUST START TODAY!

Put away something every month.
Don't live TO your means, live a bit BELOW your means.
Save what you can and on a regular basis, every month.

Sluggy

15 comments:

  1. Thanks for explaining your system in detail, because I've wondered about it before. Great explanation, and clearly, it's working!! Awesome job.

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  2. Two big thumbs up! Living on one paycheque and banking the other each month is how I saved up money that enabled me to retire two years early. You have shown it can be done if you set your goals. Great job Sluggy!

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  3. Great on saving but just remember things happen. My DH died suddenly of a massive heart attack at age 48. I am so glad we didn't pinch pennies and wait until retirement to do things we wanted to do. We took the kids to Europe and Hawaii plus Disney World a few times. We visited family in the Midwest twice a year. I am so glad we had nice vacations and expereinces we shared. I have a few things I want to do while physically able also- my health is good but I am 67. I work now and love my job with a flexible schedule. I still meal plan but no processed foods or rarely eating out for me. Just don't sacrifice for tomorrow because frankly, you don't know what it holds.

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  4. Agreed that you never know what your life holds.
    Don't worry about us enjoying life while saving for retirement. We take many trips(though anything Disney is NOT on our agenda), visit friends and family and have had lots of experiences along the way.
    We believe in making priorities but we never suffered or did without for long and we'll be aok in retirement. 8-)

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  5. Not a fan of Disney? Neither am I, especially recently.
    Great job on the savings. It really does add up! Anyway, we won't be able to save significantly until our son is finished with college....two college tuitions ($40,000) are what we are doling out for the next 3 years. (We already put two through college, and my daughter just finished her first year). Thankfully, we are still saving in our retirement accounts. We just have to watch what we purchase and really prioritize until the last one is through.

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    1. I just never got this whole Disney mystique thing.....and probably never will. lol

      Those years of overlapping college expenses were a KILLER! If you can get thru that period you can survive most anything Sharon.....

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    2. Oh I love Disney! The first time we went the older kids were around 6 and 8 and we had just moved from Connecticut to Northern Virginia. We flew. Then years later we had third child and took her several times always driving though. Now I am a Florida resident and often have a annual pass. My DD and the grandsons have probably been at least 15 times in the last few years. We enjoy everything about it except the lines and now with fast passes, that rarely happens! I brought my mom there before she died and she was like you guys- couldn't understand the Disney mystique. It's entertainment to me and I love the restaurants.

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    3. PS- Put 3 kids through college here- none graduated with a bit of debt. However, that ended when they graduated and guess what, not one has ever moved back home or asked for a cent. All have master's degrees too but they paid for those! I have a librarian/SAHM now, nurse anesthetist and assistant principal.

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  6. Sluggy, I commend you highly on your ability to save such massive amounts of money. You are a very fortunate person. I never even once earned in a year what you guys can sock away. This is not a 'woe-is-me' complainy pants comment. I just wanted to say you and your husband are just awesome people! Kudos to you two!

    That's all.

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    1. Thanks Cindi. I am grateful for Hubs income level now though we had some really lean years early on and then the kids gobbled up a lot of our resources for many years. It's nice to be at this point in our lives where the income is good and we get to keep more of it. ;-)

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  7. Have you ever shared Hubs' income on your blog? I do wonder what percentage you are able to save. Either way, kudos to you for saving.

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    1. No ND Chic, Hubs won't allow me to share that info. But last year we did save(both retirement and what I save)39.50% of his salary. This doesn't include what his employer kicks in toward the retirement account either.
      Almost 40% of income is pretty good as a savings rate I think.

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    2. It is, but if you only make $40,000 a year, 40% is a lot to save! When you make $200,000 it's a larger number but much easier to live on what's left!!! Most of my clients live on $733 a month. Depending on their rent if they live independently, they don't get much in food stamps either and only Medicaid. If you live in a group home here, you must pay $583 a month for room/board so that leaves you with $150 for clothes, personal items, entertainment, phone, and co pays/medications.

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  8. Excellent way of explaining how you save. Thanks!

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  9. Good for you, Sluggy! And Hubs, since he DID help a bit. LOL! Sometimes I feel like I just don't save enough. Then I remind myself that I saved $11 grand to put down on Hubby's car. And it was not part of our "regular" savings. That makes me feel better. :-) I am putting a big chunk of my income towards retirement as well, so I won't complain a bit about living on one income.

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