I Was Wrong: My 2017 Savings Plan Didn’t Work

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Earlier this year I shared a three-step “foolproof” plan to save money in 2017. Full disclosure – it wasn’t entirely foolproof for me. As embarrassing as that is to admit, I can take some joy in the fact that it worked for a few people who tried it.

While I didn’t save as much as I wanted to, I was able to identify the loopholes in my personal implementation of the plan. Here’s what I learnt:

  1. Make space for the unexpected
    I’ll start with step 1 in my original plan – Setting a Realistic Goal. I used the spreadsheet to budget all my expenses and determine how much I could save this year. However, I now realize that I did not allow space for unforeseen expenses (for example, the pricing of my utilities increased), emergencies, damages/repairs or unexpected travel.My plan was super rigid and, seeing that I’m a go-with-the-flow kind of person, the two didn’t work well together.

Lesson Learnt: Allow enough buffer for life changes. Lifestyle changes — like getting addicted to kickboxing for a workout — certainly impacted my savings.

  1. Savings accounts are good, as long as….
    I created two savings accounts – one with Acorns, an app that automatically withdraws and invests spare change from my expenditures. The other, a savings account with a bank, which was set up for manual transfers. They both worked well for me during the first quarter, but over time I stopped manually transferring money and just allowed the transfers to automatically be deducted from my account.

    Lesson Learnt:
    Automate all savings transfers if you’re a go-with-the-flow kind of person!
  1. Keep the secret sauce a secret!
    The secret sauce to my plan was “NOT” to dip into my savings, and boy did I ignore that rule! Since I had a very rigid plan, I found myself constantly dipping into my savings… almost every month. When I wasn’t doing that, I was blocking all transfers to my savings account so that the money would be available for immediate use. The only upside to all of this was that I wasn’t turning to my credit cards for the extra expenditure and was using the money that I saved.

Lesson Learnt: Forget your passwords, delete those apps, make it difficult to withdraw from your savings… or enroll in the army to cultivate a rigorous level of discipline!

So there it is, everything I’d do differently next time around!

Looking back, I’ve had a great year. I tried a bunch of new things, achieved some personal goals and experienced growth in leaps and bounds. While not everything went as planned, I’m now raring to go back to the drawing board to improve my savings plan for 2018.

How did your year of savings go? Do leave a comment below!

 Creative writer. Part-time engineer. Marketing professional. Swetha has an MBA from the University at Buffalo. She manages Oxigen’s presence online, providing value to NRIs and driving sales along the way. When not working, she’s usually creating things – either craft, writing or food.

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Let’s Actually Save Money in 2017

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2017 Savings

If you’re anything like me, you’ve always struggled with saving money! Ask me why I haven’t been able to save, and I can reel off 10 good reasons that will probably make you regret asking me. Because, oh, have I learnt to justify my expenses, starting from “I need this” to “I work so hard, I deserve this”. Well, something about that changed and I’ve decided to make this year different, I’ve decided to save money! It’s my challenge for 2017.

I personally enjoy challenges –  coming up with game plans, setting goals, milestones and the entire process of overcoming a hurdle to achieve something. So naturally, I have a plan for my savings and I want to share it with you. Not because it is rocket science, but because it’s the exact opposite of that. It’s the bare bones, the nuts and bolts of savings, and there’s no way we can go wrong with this!

There are three steps to this simple plan:
Step 1: Set a realistic goal
Step 2: Befriend a savings account
Step 3: The Secret Sauce!

Step 1: Set a realistic goal

This comes down to having realistic expectations and setting achievable goals.

(i) Calculate all of your fixed living expenses. Add to the list below to create your own:
– Rent or mortgage and associated costs (e.g. condo fees)
– Phone
– Utilities
– Internet
– EMIs (loan payments)
– Groceries
– Insurance premiums (medical, home, etc.)
– Home maintenance: paper towels, dish washing liquid, etc.
– Basic personal care – shampoo, conditioner, etc.
– Commuting and/or vehicle costs: fuel, maintenance, etc.

Feeling inspired? Download this spreadsheet to get started on your savings plan right away!

(ii) Calculate your disposable income.
Income – Living Expenses (i)

(iii) Calculate your discretionary expenses. No room for excuses here, you need to be brutally honest with yourself.  Some examples of discretionary expenses:
Dinner at a restaurant
– Going to an IMAX movie
– Buying another pair of high heels
– Going on a Caribbean cruise

Ask yourself two questions to help add or remove items from this list. One: are you making the most of this expense (think of gym/TV channel subscriptions)? Two, is this essential to you feeling good about life? If you can honestly answer yes to both questions, add the expense to this list and set a limit for spending on it. Take steps to axe expenses that aren’t serving you in any way, like a barely used gym subscription or premium cable TV channels that you don’t watch.

(iv) Calculate your savings goal
[Disposable Income (ii) – Discretionary Expenses (iii)] multiplied by 12

There are other ways you can go about setting a savings goal – like aiming to save a percentage of your salary, or aiming to save enough for you to survive for x months without a job. This bare bones way is how I chose to go about it because it just comes down to how much you earn and how much you spend every month. It really boils down to how much you are willing to reduce your discretionary expenses to enable you to save the money you’ve earned. If you can achieve a 10% savings of your income, you’re doing well according to norms. Don’t forget to download this spreadsheet to make Step 1 simple!

Step 2: Befriend a savings account

I’m just getting started and I like everything to be simple, so I chose a zero minimum savings account with Synchrony Bank. The process was a breeze and turns out they also offer a comparatively great interest rate. Unexpected win for me there! Here’s a website that compares interest rates at some US banks.

If you have plans to return to India in the next few years, you may also wish to consider transferring the money you want to save to your Indian bank account, perhaps an NRI account, which tends to yield much higher interest rates than US banks. Please be aware though that there are some currency and inflation risks associated with this approach.

Step 3: The Secret Sauce!

Now, here’s what makes this plan work – discipline. You have to take steps to enforce those savings… against yourself! Here are some tips to help with that:
(i) Set up automatic transfers so that your monthly savings goal amount is directed to your savings account at the beginning of month, or as applicable. Don’t wait till the end of the month to see if you have anything left to save. Train yourself to stick to the budgets you set for yourself.
(ii) Do not carry the ATM cards for your savings accounts. Simply forget about the account after you’ve set up the automatic transfers. Out of sight, out of mind!
(ii) Do not dip into your savings unless it is critical.

Follow steps 1 through 3 and just like that, by the end of the year, you will reach your savings goal! I’m excited for us to have a spectacular year and to feel good about how we are managing our money!

Want to add more to your savings? Jump right into this 52-week savings challenge!

If you’ve been successful at saving money in the past, I invite you to comment on the post below with what has worked for you. Also, look out for our upcoming posts on how to make the most of your disposable income with smart online shopping tips!

 Creative writer. Part-time engineer. Marketing professional. Swetha has an MBA from the University at Buffalo. She manages Oxigen’s presence online, providing value to NRIs and driving sales along the way. When not working, she’s usually creating things – either craft, writing or food.

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