How I Saved $12,771.46 in One Year, Four Months, and Two Weeks

Jan 23, 2015 by

          “Theresa?” I heard someone call at the gym today.

          I turned toward the voice, and there upon a nearby cardio machine was my pseudo sister! She’s been my second youngest sister’s best friend since they were in kindergarten.

          “Hey girl!” I exclaimed in surprise. “When did you start coming here?”

          “When I moved back home in April,” she said.

          “I started coming here in March! How have we never seen each other?” I wondered in shock.

          “I don’t know!” she laughed. “We have to catch up. I have to come visit.”

          “Yeah! Before my little sister is 20!”

          “How is she 17?” she asked.

          “Right? I almost cried!” I told her.

          Okay, this conversation is totally irrelevant to saving money. I just needed to emphasize the fact that, on Wednesday, my youngest sister turned 17, a.k.a. the same age that I was when I moved out of my parents’ house for the first time. P.S. She was born on a Wednesday! #emotional

          On a more related note, I bring up bumping into my pseudo sister because she asked me how I saved enough money to go to Paris and take as much time off as I have. The last time I saw her, shortly after my return from Paris, she had mentioned wanting to travel. For those of you who, like her, are trying to save a large sum of money, regardless of what for, let me tell you how I saved $12,771.46 in exactly one year, four months, and two weeks.

          Along the way, I laid out my financial planning, but I detailed the big picture, including retirement savings and student loan repayment. Saving for a big trip to Europe (which ultimately played out as five weeks in Paris and over two months and counting of blissful time off at home) was only one part of my overall financial plan. Since it was discussed in different posts amongst other financial goals and obligations, I want to provide one concise post about how I saved for Europe specifically, so it doesn’t come across as more complicated than it was, because it was actually very simple.

          In April 2013, I filed my 2012 income tax return. My 2012 income had been low because I quit my life-impairing job on July 10, 2012 and, except for a couple random jobs I picked up for a few weeks that fall just to get by, I was unemployed until January 21, 2013 (my little sister’s 15th birthday!). My low 2012 income combined with claimed carryover tuition credits that I still had from university resulted in the largest tax refund I’ve ever received: $3,222.18. That was directly deposited into my chequing account by the Canada Revenue Agency on April 29, 2013, which I immediately transferred into a President’s Choice tax-free savings account (TFSA) that was from then on referred to as my dream fund. It had an interest rate that usually sat around 2.5 percent.

          I did that to get the ball rolling, to make saving my minimum goal of $10,000 feel achievable. On July 5, 2013, after getting some other financial obligations out of the way to free up room to save (i.e. paying my entire annual car insurance premium off in the first four months of my insurance year), I began adding $250 every two weeks to my dream fund. This amount automatically transferred from my chequing account to my TFSA every time I got paid until September 12, 2014, the day I received my final paycheque before Paris.

In summary, I saved $12,771.46 in exactly one year, four months, and two weeks by:
1. Depositing $3,222.18, my entire 2012 tax refund, into a President’s Choice TFSA with an average interest rate of 2.5 percent on April 29, 2013.
2. Setting up automatic biweekly transfers of $250 into my TFSA from July 5, 2013 to September 12, 2014.

          It was that easy! Of course, two major factors were my consistency and my willpower. I never missed a contribution or adjusted my contribution amount, not even when I moved into my parents’ house last March. I could have upped my savings at that point (I put extra money toward repaying my student loan and spontaneously flew to Italy instead), but I needed to prove to myself that the same amount of money could have been saved even if I had kept living at my apartment. That way, when saving large amounts while living outside of my parents’ house in the future, I’ll be confident that it’s possible.

          Further to being consistent, I never touched the money while saving. I didn’t even look at it until after I left my job. I knew I had hit my minimum goal of $10,000 because #math, but I refused to reveal my dream fund’s final balance to myself until I absolutely had to come Europe-budgeting time. It was like that money didn’t exist to me until it was time to use it.

          Most importantly, I wasn’t eagerly waiting to hit my target. While saving, I cultivated a life I love via The Happiness Experiment – one I love so much that I returned from Europe early to get back to it. Enjoying my life while my money automatically stored itself made saving a background occurrence that I barely noticed from the main stage. Therefore, without question, my number one tip for achieving your financial goals is to live a life you love while working toward them.

Happiness Tip: To save big, live happily.

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