Putting the Savings Ladder into Practice
A Dime Saved Advice In Real Life
I recently had a friend reach out to me to ask for help figuring out her financial situation. I am not one to let an opportunity slide so I took the liberty (with her permission, of course) to write up her situation and the advice I gave her.
Many times you can read about savings ideas and practices but it’s hard to imagine how to implement it in real life- with real numbers and specific circumstances. Here is one example of using the Savings Ladder for a real person’s situation.
Mary graduated a year ago and has been living at home to save costs while working her first job. This has been great but now her circumstances have changed and she need to plan for the next few years.
She has been accepted to a graduate program that starts in two months and she has to move as well. It’s a lot! She is hoping to find a new job in her new city but is worried she won’t find one right away. What should she do?
Well, luckily, Mary has been very frugal since she started working and hasn’t spent much of her paycheck. The bad news is that it is all sitting in a checking account, doing nothing for her.
Here are the numbers:
Amount in her checking account: $24,856.00
Amount in a low-interest savings account: $4,366.00
Cost of Graduate School Tuition over the next 2 years: $16,099.00 (not including books)