I set up my savings snowball in August, right after I paid off my credit card debt. It’s been going pretty well since then – I gave an update in October when I decided to change a few things. Now that it’s the new year, it’s time for me to take another look and make some more adjustments.
Adjustments are the key to the savings snowball – unlike a debt snowball, it’s not a "set it and forget it" type of thing. Savings plans tend to change a lot more than debt payoff plans. It has to do with that whole Randy Pausch "you can only change the plan once you have one" thing.
Here’s what things looked like in October:
| Name | Goal Total | Progress | Monthly Payment |
| Textbooks | $400 | $495 | Done! |
| Student Loan Interest | $1,500 | $584 | All extra $$ |
| Getting Established | $2,000 | $100 | $50 |
| Emergency Fund | $10,000 | $382 | $10 |
| Future Car Fund | $10,000 | $25 | $10 |
| Retirement | Infinite | $26 | $5 |
So, what’s happened since then?
- Made exactly $5 in interest on my savings in November – $5 for zero effort isn’t too shabby.
- I took $1323.69 out of my "Student Loan Interest" savings account and sent it to my student loans.
- I’m done buying textbooks – potentially forever.
So the textbook fund has been knocked off the list, and the money left over in it has been rolled into other savings goals. Student loan interest is no longer a top priority – $60 a month should stave off interest until I begin repayment, so it doesn’t need to be at the top of the snowball right now.
Should I raise the minimums on some of my goals? My car fund and retirement fund are obviously growing at a snail’s pace. But my Getting Established fund is pretty important to me, because graduation is now only a few months away.
Unlike debt repayment, these choices don’t have to be 100% right, right now. Money in savings can be moved back and forth as I change my mind about things – unlike debt repayment, where once you make a payment, that money is gone. So, here’s my off-the-cuff new savings snowball:
| Name | Goal Total | Progress | Monthly Payment |
| Getting Established | $2,000 | $1066 | All extra $$ |
| Emergency Fund | $10,000 | $425 | $10 |
| Future Car Fund | $10,000 | $55 | $10 |
| Retirement | Infinite | $36 | $5 |
| Student Loan Interest | $500 | $68 | $60 |
So, not many huge changes. I would like to save enough to open my IRA in 2009, and I would like to start a fund to pay for braces, but now isn’t the time. I have to focus on the Big Bad coming up: graduation. That means getting ready to make payments on my student loans, and cushioning that Getting Established fund as much as possible.
This is the plan until then. After graduation, everything will change.
I’d get your Getting Established fund done first before worrying about the others.
That, and your ROTH..
@Fabulously Broke – The reason I’m also focusing on my Student Loan Interest fund is that my student loan interest will capitalize into my principal 6 months after graduation. So if I tackle it now, it’s simple interest, but if I ignore it until repayment starts, it turns into compound interest!
Also, I very much would like to start a Roth, but I’m not sure that I’ll have the minimums to do it this year. I have to worry about getting myself on my feet and getting one of those “real world” jobs before I can afford either the $3,000 minimum to get a fund at Vanguard, or the $50 a month investment to open elsewhere.
I must agree, you have your finances pretty well thought out. Am going to take a leaf out of your blog and do some financial planning myself.
– A fellow student surviving on loans π
Boy does it ever change after graduation! I’ve changed my plan half a dozen times since then!
Hi Stephanie,
Wow… I just stumbled upon your blog today while looking up debt management and I wish I’d seen this blog years ago. I never knew half this stuff and I’m 25! I’m not only really late on learning about my own finances, but I’m just now getting started as a freshman in college. If you ever have the time, I’d like to talk to you about my options as a college and financial noob. I really hope you are studying for a degree in finance, because you should be making this your career as you have plenty of talent for it.