Should I snowball my savings?

This week I’ve been pondering the question, should I take the snowball approach to my savings funds rather than saving a bit towards everything at the same time? ‘Snowballing’ debts has been a popular approach whereby the person/people in question pays the minimum amount required on all of their debts apart from the smallest one. They throw all available money at the smallest debt until it is gone and then pay off the next smallest etc etc until it is all gone. Personally I’d go for the one that was charging the most interest but that’s aside from the point!

This year we have a lot of little savings accounts on the go. They include:

  • School uniform fund (plus other clothes and shoes for Girlie)
  • clothes and shoes for baby boy
  • birthdays, birthday parties and Christmas
  • girlie’s activities (dance and swimming)
  • the £500 window fund
  • The £500 emergency fund
  • ISA repair!
  • any other home improvements

I also ought to be saving for the school holidays but that’s a bit beyond me at the moment!

I would not like to give up saving each month for the things that directly involve the children (ie clothes, activities, Christmas). It just feels too risky to me somehow. But with the two £500 funds, I’m wondering if I should throw all of the available money at one fund and then the other and so on.

I really want to make sure it all happens but I am also aware that a mental ‘boost’ from having achieved a target would make living on a small budget more pleasurable and maybe provide more motivation to carry on. But maybe I ought to keep saving a bit at a time knowing that I will get there in the end and that all of these important funds are being looked after. Snowball or tortoise? Any thoughts anyone?

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3 thoughts on “Should I snowball my savings?

  1. I think my priorities would be to pay off any debt (focussing first as you say on whatever has the highest interest rate), then filling the emergency fund (the point about an emergency is that it can come at any time and take you by surprise. The fund reduces the stress of worrying and wondering when it will come), then the other things. As you’re unlikely to be able to pay for the windows before the end of this winter, I’d try to aim to schedule that in for the end of the summer, so that your heating costs / condensation problems are fixed before the cold weather hits again. And alongside look ahead to when the other things will be needed and set money aside before they arise. Including some for the fun stuff – you’ll remember the school holidays after you’ve forgotten how nice it was to have better windows! But even the fun stuff can be done without massive expense, as you already know from experience.

    And when you do that, you may find that opportunities come up along the way to spend a little less but still achieve your aims: second hand school uniform and baby boy clothes; buying presents in sales or when offer.

    I was often complimented on the lovely clothes my sons wore when they were little, but I rarely bought anything full price and lots of their clothes until they went to school were second hand – charity shops, friends’ children’s outgrowns. And school uniform was often outgrown before it was outworn, at least until they were in Y2. After that nothing lasted longer than just doing the two of them. I was at least lucky in having two boys, at the same school, and the younger nearly always inherited the older’s stuff (apart from shoes).

  2. Are these each a separate account? I’d go with the tortoise approach and make a monthly standing payment to each of them and then anything left over stick in your window fund which could also be used in an emergency (but hopefully not needed!)

  3. Zoe

    I personally prefer the snowball method for savings mainly because I prefer to see one larger number than many smaller numbers. I keep a spreadsheet that details what each goal is, how much has been saved against the goal with each deposit and what the overall balance is for each goal. I also have a double check built in so that the all the sub categories add up to the overall total.

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