The Year We Saved $10K: Homes and Weddings
I’ve gotten a lot of your “the year I saved $10K” stories — we are quite a financially savvy community, as it turns out.
Here are two stories to start off. They share the theme of, as Sara notes below, “building savings that are actually spendings.” Lauren and her husband saved up for a down payment on a house, and Sara and her fiancé are saving up for a wedding.
Lauren: My husband and I spent the last year putting away $2,000/month in order to save up for a down payment on a house. We were able to do this mostly by having awesome jobs — our combined take-home pay is ~75k, plus my husband gets some stock grants. We also wouldn’t have been able to do this without living together and combining finances. It took a little while to adjust to the saving schedule, but I think it helped that we started right after we got married so there wasn’t much time to lifestyle inflate and adjust to having two salaries and only one apartment.
After rent, bills, groceries and necessary stuff, we budget $200/month for eating out, $80 each as our “fun money,” $150 for travel, and $80 for dates, which is enough that we can have hobbies and do things with friends and travel to out of town weddings, but we’ve found that we still have to check the budget at the end of the month before deciding if we can do something. Sometimes it’s difficult to justify not spending money when we see Facebook friends on exciting trips, and there have definitely been days when I’ve done some creative accounting when we’re sick of cooking and just want to go out for dinner, budget be damned.
Now that we have the house, we’ll figure out what the new normal should be (the mortgage is less than rent, but bills will be higher probably?), and we’ll likely increase the fun stuff budget to allow for more travel and to let us feel like we have a little more room to do some of the more expensive things around town. I’m still planning for a savings/investment rate of at least $1500/month, which we’ll use as general savings for our eventual kids, college, retirement, basically whatever happens.
Sara: This is the year we saved $10,000.
Then again, “saved” feels like the wrong word. I have in the past been lulled into a sense of false security by my Mint “Net Worth Over Time” balance sheet, with its growing green stacks of “Assets.” I now remind myself daily that these aren’t savings, they’re spendings.
This is because this is the wedding money. This is the money my fiancé and I have painstakingly piled over the past year, in order to provide 135 of our nearest and dearest with a buffet dinner, drinks and music to dance to, and with which we will clothe ourselves beautifully enough to feel less self-conscious while those 135 people watch us declare eternal love.
This money sits snugly in my savings account as I write this, but in a month I will be married and it will be gone.
Our decision to get married was partly financial. I got a promotion and raise at work and he got a full-time job, bringing our pre-tax household income close to $80,000. This seemed like an exorbitant amount of money to us. How could we not get married on that money? Never mind our debts and student loans and total lack of savings — we were doing this.
We challenged ourselves to spend no more than $2 per person on breakfast and no more than $2 on lunch in any given day. I learned the off-the-menu options available at the work cafeteria: one scrambled egg for $0.75. A side of corned beef hash for $1.25. One hotdog for $1.00. He discovered the joys of yogurt bought in bulk containers. We stopped making the kind of under-$5 purchases we had always made thoughtlessly before, like a magazine at the grocery checkout, or a pack of barrettes at Rite Aid.
As the savings began to grow, I suddenly got this whole money thing. I began to read every personal finance site I could get my hands on. I dug into Mint.com and spent hours crafting complex spreadsheets. I began to enjoy saving! I’d always been a can’t-take-it-with-you type, where every dollar burned a hole in my pocket, but now I was nearly addicted to watching my balances grow.
And suddenly it wasn’t ok with me that once we paid the caterers, the florist, the seamstress and all the rest, our money would be gone again.
So I started an emergency fund. And a heating oil fund. And upped my 401(k) contributions. I signed up for my work’s pre-tax healthcare FSA card. I … maybe got a little over-enthusiastic.
We had to tighten our belts further. I haven’t been clothes shopping in seven or eight months. I restricted the use of fans in the house despite the summer heat, to keep the electricity bill low. I called my credit cards and got my interest rates lowered. I learned to cut my own and my fiance’s hair, and overcame my fear of plucking my own eyebrows. I learned to never — EVER — buy brand name goods when there was a generic available. We started buying the almost-not-quite expired goods at the grocery store, the ones with the “$0.50 Off!” sticker haphazardly attached to the cover. I cooked these foods in bulk and we ate the same meal six nights in a row.
As of this writing, we have saved $11,596 in the wedding fund, with one month to go. This will pay for almost our entire wedding and a week-long honeymoon. We may have to put a couple grand on a credit card, but I expect to be done paying for the wedding within two months of the event.
We’ve also saved $1,300 in our emergency fund, $200 in our heating oil fund, and have contributed almost $3,000 to my 401(k). We have also paid off about $5,000 in loans. There have been months where my checking account got down to less than $100… but that Net Worth Over Time chart kept going up and up, and we kept plugging along.
After the wedding, we’ll be able to relax a little bit. But now that we know how to save, know how to delay gratification, how to tell the difference between thoughtless extravagance and necessary comfort, we’ll probably never spend money the way we did before. For the first time I can see us making and saving for goals. If we needed to, we could survive on one salary. Saving for our wedding has better prepared us adulthood, and thus for marriage.
Previously: The Year I Saved $10,000