an example savings plan – how ours works

This week I’m participating Women’s Money Week. The aim of the week is to create a dialogue about the financial issues specific to women and coincides with International Women’s Day.  Each day there is a topic for participants to write about on their website. Today’s topics is about Saving Money.

dreamstimefree_3722833I’ve written in the past about how we create a savings plan using excel, and how we save for multiple goals, but I thought today I would share exactly what we are saving towards at the moment to give you an idea of what saving for multiple goals looks like in real life.

Our savings plan is a work in progress; our goals change as our needs (and wants) are met and we develop new ones (for instance, we’re saving for a second baby car seat at the moment, obviously not something we save for all the time).

Also, each year I save for more and more specific things. For instance, I wrote the other week how it never occurred to me to save for the replacement costs of household goods like linen and furniture – we now put a little aside each week to cover those future expenses when they crop up.

The whole point of doing this is to keep us out of debt and reduce the pain of paying large bills when they crop up. Putting aside a few dollars each week towards a bill is much easier than having to suddenly come up with several hundred dollars when a bill falls due.

And I admit that in some instances we only put $2 aside for certain expenses (like dental for the kids – my alternative to getting private health insurance to cover possible teenage braces etc.) because that’s all we can reasonably put aside at the moment. But $2 adds up over the course of a year or years and makes life easier down the track (and we can always increase this amount in the future, re-evaluate our savings priorities or spend it on something else if it turns out the kids have teeth straight teeth). Of course, you have to be disciplined not to spend this money on something else in the meantime.

To make this process as easy as possible, I automate it. I’ve set up an automatic transfer into our savings accounts that is deducted each pay (as described here) and all I have to do is update my spreadsheet (which really is optional; the main thing is to actually save, but I enjoy tracking our savings and it does help to keep track of whether you’ve reached your goals / can afford to pay the bills).

Our financial strategy at the moment is similar to zero based budgeting, however we don’t quite budget every single dollar, I do leave some money ‘un-budgeted’ for extra grocery expenses or just splurges, outings or small things that can pop up. And if, at the end of the fortnight that money is still left over, then I might put it towards savings.

While I use excel to track our budget and multiple savings goals, there are many ways to do this: you could use a bank that allows you open several savings accounts without incurring extra bank fees (and therefore eliminate the need for data entry yourself – just automate and forget); you can track your savings amounts on paper; or use one of the various electronic budgeting software options available (more on these in the near future).

So onto our list of savings. This is what we put money aside for every pay day. As I mentioned, in some cases it’s only a dollar or two, but a little is better than nothing (in the free eBook available I go into how I calculate how much we need to put aside to cover regular bills).


Household Expenses Provisions
  House deposit   Dental
  Household goods   Medical / prescription meds
  Household furniture   Vet / pet needs
  Household maintenance   Baby needs
  Home and contents insurance   Clothing
Emergency Fund   Birthdays
    Fun money / outings / misc.
Regular bills  
  Phone / net bundle Holidays / Travel
  Electricity   Travel home to mum’s place
  Water and sewerage Big / Specific purchases
  Body corporate fees   Window screens
Car   Roof insulation
  Car registration   Laptop
  Car insurance  
  Car repairs / maintenance Kids
    Future medical / dental


Creating a specific savings plan is another way to manage your money and it means you can pay for future expenses with cash and without stress. You don’t need to track every expenses like I do, you can just put aside a fixed amount each pay day to cover everything. However, getting specific means that you can be certain that you’ve saved enough for each expenses or it can show you how much more you will need to save.

What things do you save for? Can you see anything that I should add?


This post is part of Women’s Money Week 2012. For more posts about saving money see the Saving and Investing Roundup.

Women's Money Week 2012 Participant

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  1. Cara says

    So do you have bank accounts for each one or just the ones typed in a bold font? I do my budgeting similar except I prefer to transfer it myself instead of having it done automatically. Probably because I’m not as disciplined as you and I like to be able to change the amounts if I want to. But I also enjoy the process of sitting down each fortnight and manually putting the money in, it gives me time to reflect on the increasing dollar signs and pat myself on the back for not being tempted. It also makes me realise when I was tempted how much I COULD have gained if I had stayed the course. My envelopes/accounts are a bit more general like “Car Stuff” “Holiday Stuff” “Household Items” “Everyday Bills” I used to have one titled “Big Bill Lump Sum” Which was a debt I was having certain amounts automatically deducted plus I would put aside a certain amount each fortnight to then apply as a lump sum payment when it added up. I had negotiated with them and they agreed that each time I paid off a certain amount in a lump sum they would drop the interest rate. I am now completely debt free and i bought a car recently, which was separate from the debt. I highly reccomend talking to you bank as it can’t hurt to ask. What’s the worst that could happen…? They so “No”, then you’re not any better off, but you’re not any worse off either.
    Reading your blog has helped keep me motivated. So keep up the good work, and thanks for helping me stay focused on my goals, and achieving being “in the black”.

    • says

      I used to do it automatically, then for the last couple of years did it manually myself for the same reasons. BUT, I’ve gone back to automating it and I find we save lots more because I now ‘can’t’ change the amount if I want, which is what I was doing when I did it manually (well, I can, but I haven’t yet). LOL, like I said above, I think the problem is that I’m not disciplined! This means I don’t need to try to be. But I still get the satisfaction of adding to our excel budget.

      I use one account for the lot and break it down in excel. My bank doesn’t offer multiple free accounts ??? I should check that out, maybe they do now.

      Congratulations on being debt free! That’s a great idea re the interest rate. I agree, it doesn’t hurt to ask.

  2. says

    I do this but it broader strokes. I put away $200 per week (as I get paid weekly) for my bills – strata, electricity & gas, water, council rates – and any other bills I might struggle to pay from my usual weekly allowance (like the electrician coming). I also put money away to refinance my mortgage at the end of the year (which in the mean time is and would be my emergency fund). Another (free) account saving to do my ’12 in 2′ list – 12 bucket list style things I want to get done in the next 2 years. I then, as a legacy before I had a bills account, save $20 per week for my annual lump sum payment of health insurance. Anything additional can help cover medical expenses that I might struggle with in my weekly allowance. I love knowing I have money set aside for bills, it means I never feel ‘poor’ one week due to bills (I just feel poor for other silly choices, like eating out too much usually!). Thankfully I have no kids, but one day I will, and then I’ll have so much MORE to budget and plan for!