Two months ago, when I paid off my credit card, I came up with a savings plan for my newly freed-up money. In case you don’t remember, or haven’t read that entry, the idea is very similar to a debt snowball. Rank up savings goals in priority order, save a set amount toward each of them every month, and throw any extra savings money at the goal at the top. Once the top savings goal is reached, start throwing all extra money at Priority #2.
Here’s what my Savings Snowball looked like when I made it in August:
| Priority | Name | Goal Total | Monthly Minimum |
| 1 | Textbooks | $400 | All extra $$ |
| 2 | Student Loan Interest | $1,500 | $50 |
| 3 | Getting Established | $2,000 | $50 |
| 4 | Emergency Fund | $10,000 | $10 |
| 5 | Future Car Fund | $10,000 | $10 |
| 6 | Retirement | Infinite | $5 |
Two months later, here’s what things look like:
| Name | Goal Total | Progress | Monthly Minimum |
| Textbooks | $400 | $495 | Done! |
| Student Loan Interest | $1,500 | $584 | All extra $$ |
| Getting Established | $2,000 | $100 | $50 |
| Emergency Fund | $10,000 | $382 | $10 |
| Future Car Fund | $10,000 | $25 | $10 |
| Retirement | Infinite | $26 | $5 |
Some things you might notice:
Textbooks: I put more aside than I originally planned. As I was saving, I was also buying the textbooks for my first term of the year, and the bill was higher than I expected. So I put some extra cushion room into this account.
Student Loan Interest: This is now the main focus of the snowball. I’ll tell you, I never would have thought I’d make this much progress in only two months! I’ve been acting like a squirrel, hiding nuts for the winter. Soon my income will dry up a bit (it always does in November/December), and I’ll be glad I got a head start on my savings before then!
Getting Established Fund: I wish there was more here, but that’s the nature of the savings snowball – this doesn’t get focus until my student loan interest is taken care of. Still, things are on the right track, so I’m not too concerned.
Emergency Fund: If this number looks high, it’s because I already had it started before the savings snowball. Also, it’s fed by sources other than just the snowball!
Future Car Fund and Retirement: Chugging along! Once the student loan interest is done, I plan to increase the minimums for these. Maybe. It depends on how things are going at that point.
Flexibility
My savings snowball might not be perfect, but it doesn’t have to be. If at some point I decide, for example, that I wish I had put more toward Getting Established than other goals, I can yank money out of the other savings accounts and move things around. Nothing about this is set in stone.
Some people think I should put more toward retirement sooner. Or that my emergency fund goal is too high. Or that I shouldn’t work on anything except my emergency fund. But it’s working for me, for now, and I can move any of the money at any time, as long as it’s all just sitting in different savings accounts.
Which is the beauty of the savings snowball.
What do you think? Do my goals need adjusting? Are you ready to start a savings snowball of your own?
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14 responses to “Savings Snowball in Action” 
$26 already? Infinite is just a stone’s throw away now!
Hey I love your blog. I was just wondering where you work. Do you get alot of income from blogging?? Just wondering
@Jackie:
I have several jobs, actually. Most of the income that led to my textbook fund filling up came from my summer job, as the Recycling Administrator for my college.
Currently, I have a different job on my campus, and I also get a stipend for directing the plays for a local high school drama club. I also get a little freelance income from helping maintain the website CashDuck.com. And I do make a little income from this site – but it’s not what I would call “a lot!”
I also occasionally get paid for my knitting.
It seems you are on the right path with your goals and things are looking good. If you buy your textbook online that may help you save some more money to put in your other funds.
Craig
http://www.budgetpulse.com
It looks like you’ve got yourself organized and are heading in a good direction; savings depends a lot on the person being concious of all their financial transaction and financial health. Just as a suggestion, check out Thrive – just to boost your organization and if you even need some advice. It might work for you it might not, but it seems like you’re doing well with your own plan. I wish you luck!!
We paid all of our credit cards off a few weeks ago and have started writing checks for all purchases. Sure feels great!
Way to go! Getting started is the hardest part.
I do my goals pretty similarly. I have some goals that I just do an amount on each month, others that I prioritize and go down the list throwing all my extra cash into each one, and some that will move from the payment plan to a priority at some undefined point in the future.
You can see my “snowball” goals in the side bar of the blog I’m setting up. Not quite ready to launch yet, but Coming Soon!
http://thewonderfulworldofslinky.blogspot.com/
P.S. I think your goals are awesome, especially the getting established fund and I wouldn’t really worry too much about retirement until you’ve graduated, but definitely go for it if you can afford it!!
@Craig: Yes, I do buy my textbooks online – nearly all of them! Although I had a bad experience this quarter… I will probably write a post about it after it’s settled.
@Slinky: Well, the retirement fund is only $5 a month, for now. I feel it’s important to get that mini-snowball rolling, even if it’s just so that I feel like I’m making progress.
Also, Slinky, I can’t wait for you to launch your blog! You’ve got at least one subscriber to start with!
I think you will do very well in life with this kind of financial planning I know many people hwo make a ot of money but have pooor money management skills
What a great article and may I say an excellent blog! I’ve read many, many blogs all around this subject and this is by far one of the best! Keep up the good work!
Great job on savings. Most people don’t start working on their finances like you are until much later in life. You’ve got the right idea – savings snowball. I always like to show my clients how small savings can add up to big money over time:
Save $1 per day = $30 per month = $365 per year
Save $50 week = $200 per month = $2,400 per year
Great advice! Right now my expenses aren’t too bad (since I’m mostly just taking out loans for college…I’ll worry about those later…). So right now I’m putting a good chunk of my wages from my part-time job in my savings account. I don’t need the money now but I’m definitely going to need it later!
Amazing progress in just 2 months.
Many people never realize how important a savings snowball is and you are executing it very well right now.