Sunday, February 6, 2011

A Savings Visual Aid

I've heard it said that the number one thing that couples fight over is money, followed closely by lack of communication.  So I guess we could logically conclude that lack of communication about money would be up there on that highly-argued-about list.

That is not the case for Tim and I.  We talk money a lot.  And being the engineering nerds wonderful people that we are, our discussions usually end in a spreadsheet being formed.  Yup.  Good 'ole Microsoft Excel, or, more recently, Google Docs.  We even have a brand-new spreadsheet we created called "What to do with any extra money."

As geeky as it may sound, this spreadsheet is great.  When any extra money comes in - tax refund, bonus, money found in a pair of pants - we look at our handy-dandy spreadsheet and decide which of those line items to spend our money on that day.  It keeps our goals in front of us - both long-term and short-term - and stops us from just blowing our money on the first cool thing we see.  Also, having this list shared in Google Docs means we can both view it at any time as well as add to it as new things come up.

Some of the things on the list are short-term:
- Special Date night
- Weekend trip with family
- Increase Emergency fund

Some are just cool wants (that we would save for and pay with cash, of course):
- ipad
- New tile backsplash in kitchen
- Mantle for our fireplace

And some are much longer-term:
- Save for a "new" car (new-to-us anyway)
- Fund our Roth IRA's
- Put extra money towards the principal of our mortgage

As hard as it is to do some of these, the hardest for me to put my money towards is the mortgage.

In one of our many discussions about our finances, I made the comment that when we put extra money towards the house, it feels like we're throwing it in a black hole.  Even though, theoretically, I know it's better off pay off the house early, most of the time it seems like we aren't even making a dent.

So my brilliant husband came up with the idea of a visual aid for us.  That way we can see that little dent that we are making and see our house getting paid off.

SO.....this is what we came up with (now remember, we are engineering nerds, not artists):

See all my little boxes on there.  Each one represents $100.  Each month after we pay our mortgage payment, we can go color in the number of boxes for the part of the payment that went towards the principle.  I even made the windows, door, toilet, bed, fan, etc. into boxes to color in.  Then came the fun part - filling in the boxes for the amount we've paid so far.

Then I put it in its permanent home - the back of our bedroom door.

So there you have it.  We now own half of the bottom floor of the house in our little visual aid.  I love it so much that we are thinking about making a similar picture to show how much we have saved towards a new car.

What about you?  What encourages you to save?

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