How Have Your Savings Goals Changed Over Time?

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close up of a dollar bill, specifically the back side of the Great Seal of the United States

I found this super old post (2009, aww!) the other day, talking about savings goals, and I was struck by how much my approach has changed. So let's discuss: Have your savings goals changed over time (in more ways than amount)? If you could travel back in time, what would you tell your younger self to change about your savings goals?

{related: not sure what to do first/next in your personal finance journey? here's our money roadmap}

What My Savings Goals Used to Be

Back in the day, I noted that my father had advised me to always set a savings goal. It started at $100 monthly in my lean days as an editorial assistant and became a lot higher when I started my lawyer life at my BigLaw firm.

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{related: financial tips for new lawyers (or other women in their first high-paying jobs!)}

Back then, I noted that I preferred to manually move my savings from one account to another. At the time, there were some crazy interest rates available in money market funds (I remember 7%!), so I would transfer the money from Chase to Schwab.

I saw some big benefits back then to doing it manually:

First, how much I save is very present in my mind — my savings target has sort of morphed into a checking account target. I don’t like to keep more than a certain amount of money in my checking account and I move everything above and beyond that into my Schwab account. (My savings target is more like a minimum, in my mind.)

Second, I am very aware if I'm dipping into my savings. If I can’t meet the minimum savings, I reexamine my month — what was I doing that cost so much money? If I actually have to move money from my savings account back into my checking account, I buckle down even more.

It's interesting to read, because the methods and theories behind my savings goals have changed quite a bit.

How My Savings Goals Have Changed Over Time

The few big things I'm doing differently these days is a) saving almost everything automatically, b) choosing when to invest instead of save, and c) saving for multiple financial goals in different accounts.

(I also use Ally instead of Schwab for my savings because they have high interest rates and Schwab money market funds have been lousy for at least a decade. Note that a lot of readers prefer other banks over Ally, though!)

I Love My Automatic Savings

As I've noted before, I love to automate my savings, primarily to amortize big bills I know are coming (e.g., I have one account for all of our insurance bills over the year, another for estimated tax payments), but also to encourage me to spend.

I adjust the numbers for the different savings accounts manually (and fairly often, maybe twice a year), but the money is out of sight, out of mind.

I also move money over from the various savings accounts pretty regularly without feeling bad. It's kind of a relief if we get some large bill for something (e.g., ear tube surgery for one of our sons!) because it's kind of like found money that is magically there to pay our bills.

Choosing Investing Over Savings

It took me a while to figure this out, but I've also been doing automatic investing for a long time, setting up $100 a month or more to purchase a general index fund.

I do adjust that number fairly regularly, also — it can be upwards because all of our savings accounts are “full enough,” or I'll adjust it downwards if I think we have some big purchase coming up that we'd prefer to have more money readily accessible for.

I invest manually at other points through the year, but I'm a fan of the automatic investment.

(Plus, once you set it up it's easier to change the number than to figure out how to do it again. But here are instructions on how to set automatic investing up for Schwab and Vanguard that have been pretty recently updated.)

Saving for Multiple Financial Goals in Separate Accounts

This is a big change that I think I've only started doing recently — of my multiple financial savings goals, I now have a set amount that I move into a vacation fund.

I really, really wish I had done this when I was younger. Back then I just had one big bucket in my money market fund, and it felt like a loss every time I had to go into my savings to cover some expense. As a result, I didn't travel a lot unless I needed to for weddings or whatnot, and I really, really regret that.

At the time it felt like I didn't know what I was saving for — buying an apartment? getting married? going back to school? — so I wanted to save as much as possible… but I still think there would have been room in the budget for vacations.

{related: cash savings or retirement savings? where to stash your cash when you're unsure what you're saving for}

Readers, how about you — how have your savings goals changed over time, either in method or theory? If you could travel back in time, what would you tell yourself?

Stock photo via Stencil.

4 Comments

  1. So, I would tell myself”

    *pay yourself first. automate your savings, and what’s left is what you can spend, not the reverse.
    * to save more earlier. Compounding is real thing. It really does add up. Prioritize it.
    * to bow out of more weddings but send a nice gift (yes really–I spent ungodly sums circling the globe for some friends that I am no longer in touch with, not because anything specific happened, but we just fell out of touch over the years. I am generally of the “go on the trip!” ilk, but…draw the line somewhere).
    * that I don’t need so much stuff–clothes, shoes, books, wine–you can get by with so much less if you buy good quality, classic things and just buy less. Don’t buy the want–buy the need, replace only what has worn out, don’t have tons of duplicates. At one point I had over 70 pairs of shoes. That’s nuts. That means I could wear a different pair every day for months!
    * to really prioritize marriage and finding a partner. Controversial opinion coming from a huge feminist, but pairing up with a like-minded person means you will be able to save more and get closer to financial freedom much faster than as a singleton. (Note–I am a singleton. I wish I had locked someone down when I was still young and gorgeous!)

    My shopping habit that was prevalent in my 20s and 30s has all but died in my early 40s, post-covid. I look classy and have nice clothes. They may not be one hundred percent trendy, but I am always pulled-together. I remind myself of the Sex and the City episode where Carrie found out that she couldn’t collateralize a loan with her Manolo collection. I’m glad I’m on track for financial freedom now.

    1. I feel the opposite. If I could got back in time I would tell myself to spend less money on stuff (I did NOT need a dozen-ish Coach bags at $200-400 a pop in my 20s!) and more on experiences, including attending weddings. Yes, some of the friendships have drifted, but everyone whose wedding I attended was an important person to me at one time and I’m glad I got to celebrate them even if we’re no longer close. I was also so appreciative of everyone who went to a lot of time and expense to attend my wedding, and you can’t expect people to show up for you if you don’t do the same.

      Also not sure I agree on the marriage point. Two incomes go farther than one, especially in areas where housing costs a lot, but divorce is insanely expensive and has really set back a bunch of my friends financially. Given how many marriages end in divorce, I’m not sure being single is objectively worse financially – you’re avoiding the huge potential pitfall of divorce.

  2. Traveling back in time: quit the job and leave the high cost of living area. Frugality by necessity in a decade in Washington,DC developed practices that have made it easier to save and invest now that I am back in the Midwest. However, it feels like I lost a decade of savings and investment to HCOL area.

  3. *Instead of therapy, read books. This is something I figured out about myself later but the hardest times I’ve gone through I’ve gotten through with a book on the topic and a couple of sane friends. I could have saved a lot of money I spent on therapy reading and being more social.
    *Minimize “obligations” and maximize networks. A post above says she traveled to too many weddings. I totally get that, but these for me were huge networking opportunities both personally and professionally. I think I should have done a better job of nurturing those friendships that would lead me toward the life I wanted faster and weed out the ones that wouldn’t (sorry drinking buddies, your weddings should not have been prioritized). “Obligations” is in quotes because they were what my 20 year old self perceieved as mandatory (certain friend circles). Family obligations I would still maximize and revel in.

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