Well Heeled Blog » Save Money, Have Adventures, and Travel the World

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Discouraging

Sometimes, saving money is discouraging. Especially if it’s:

1. For the short-term to medium-term (no compounding magic here!)
2. For a very very large amount (multiples of what you’ll be able to save)

For example, It’ll take me almost a year to save $10,000 in non-retirement assets, but that’s less than 1/10 the amount needed to fund 2 full years at a good grad school program. I have friends who have entered graduate school (law, medicine, business) where they will take out hundreds of thousands of dollars in loans. Up against that monstrocity of a number, how can one really work up the motivation to save $5 on a sandwich, or $20 on a dress?

Today, I stopped by Ross on the way home and found a beautiful polka-dot dress for $20 (black, with magenta trim). Unfortunately, the size wasn’t quite right. I struggled for a few minutes to adjust the straps and briefly contemplated bringing it to a tailor… but finally gave up.

It’s a sign. Even Ross knows that I’ve been spending too much lately and is telling me stop.

  • Red - I disagree, though with today’s interest rates it’s not as enticing as it could be.

    Try this savings goal calculator:
    http://www.bankrate.com/brm/calc/savecalc.asp

    If you’re trying to save $100,000 in 5 years (these are round numbers comparable what me and the fiance are going for), and you get 3% APY savings, you’ll have made $7187.86. That’s HALF the price of a new car. Of course, I’m hoping the number will be higher than that if savings accounts go up a bit.

    If we can average 4% APY, Interest will pay for $9500 of that $100K, not too shabby if you ask me.ReplyCancel

  • quarterlifegirl - While I see Red’s reasoning, I can definitely relate to what Well-Heeled is referring to. If a goal is just a few weeks or months away, I will excitedly stay away from the mall in order to save up for, let’s say a vacation, or a gift for a loved one. However with my down payment fund…I don’t even know when I’m going to move, and $5 seems insignificant compared with $36,000 that its hard to stay motivated. Automated banking is my best friend in that case…because without any effort (read: deprivation) I’ve been able to save up over time.

    lol. I can definitely relate to seeing “signs” too!! Happens to me all the time, but I convince myself that its a good thing when something doesn’t fit as opposed to it being an “unfortunate” event. ;-) ReplyCancel

  • quarterlifegirl - To add to Red’s interest argument, that does kind of work as a motivator as well. My bank has a line item that tells me how much I’ve earned in the year and just looking at that cheers me up sometimes. (But then I think “how much did those shoes I bought last month earn me?” lol)ReplyCancel

  • Kate - When it comes to law, medicine and business, it’s become virtually impossible to get a degree without debt. It’s disgusting! Still, there are some ways to get around at least part of the expense. Like setting your sights on a great state school’s program and moving in-state to get the tuition break. Or working for a firm that will pay for the degree–a woman I babysit for worked for McKinsey & Co and they paid for her MBA from Stanford, another woman I know worked as a paralegal and did law school part time so that her law firm would reimburse the cost of tuition.
    I only know about this for law, but there must be some similar equivalent for other programs, but if you have high test scores and decent grades you can often get a major scholarship. It can mean choosing UCLA with a full ride plus stipend instead of NYU, but the freedom of being debt-free with an advanced degree would be worth it.
    I guess what I’m saying is that you can make this kind of saving less daunting by attacking the beast from multiple angles.
    Good luck. :) ReplyCancel

  • Fabulously Broke - I know how you feel but for me, I always just remind myself that every little bit counts – and I play with my debt repayment or savings excel sheets and wonder “if I put $700 more towards my debt this month what would it change?”… things like thatReplyCancel

  • Julianne - There are lots of ways to go to school without having to pay so much. Some have already been mentioned – going part time and letting your employer pay is a great idea! There are also graduate assistant positions that pay for tuition and fees as well as giving you a stipend so your savings would be to make up the difference between living like a dirt poor grad student and not – even at $1K per month, for two years, you’re looking at saving $24K and not $100K for education.

    I can not stress enough that graduate school – more than undergraduate – is what you make it. Going to a decent/good school with profs that you like doing research on your interests without going into debt is a better choice than going to the “best” school you get into and taking on debt to do so. In some ways, it is better to be a bigger fish (or shinier flashier fish) in a good pond rather than an average fish in the best pond. Being able to be involved in research, being a graduate assistant, getting published, going to conferences are going to have a much greater impact on your life than the name of a school. The school needs to be reputable and respected – but choose the best school for you (which includes your finances) not just the best school.

    I am one of those people who owe so much in student loans that it often seems pointless to pass up the sushi I want now to put $20 toward my debt. The thing is that over time, every $5 and $20 choice adds up. It is also important to distinguish student loan debt from other debt – just because my student loans are out of control, it doesn’t mean that the rest of my financial life has to be.ReplyCancel

  • SavingDiva - I totally understand what you’re going through. I’m struggling to save for my emergency fund. I know that it’s going to be extremely important when I move, but I really want to enjoy my time here….ReplyCancel

  • School Quality Is Key - I completely disagree with Julianne regarding school quality.

    Going to the best school you can attend stays with you and on your resume for a lifetime. I’ve always taken that route (Ivy BA, Ivy JD, leading to many offers at top law firms) and found that it just makes things… well, easier. By going to the best schools, you’ve removed one hurdle in the career sprint. You’re going to compete with people who’ve gone to the best schools… why put yourself at a disadvantage when you don’t have to? The debt will work itself out, especially if you’re going the MBA/JD/MD route.ReplyCancel

  • StackingPennies - $10k in non-retirement in a year is FABULOUS, don’t kid yourself!

    However, I understand what you mean. It is just a drop in the bucketReplyCancel

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