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?