Quitting smoking kicks off saver’s road to $40K

One of the pleasures of a book tour is the people I get to meet. Let me introduce you to Jane, whom I met on my recent trip for my latest book, Money Talks. (Jane isn’t her real name.)

Here are my impressions of our conversation:

Jane walked up to me, eyes sparkling, a huge grin on her face. “You saved my life!” she said very matter-of-factly.

“You exaggerate,” I replied, grinning at her.

“Only a little,” she said, smiling back at me. “Because of you, I saved $40,000 in two years so I could buy a home.”

“Wow!” I said, impressed. “How’d you do it?”

“The first thing I did was quit smoking,” replied Jane. That saved her just over $7,000 in two years. “I opened up a savings account and called it ‘Not Smoking’ and every week I moved the equivalent of what would have gone up in smoke into savings.”

What else did Jane do? She carpooled with friends. “And I started making my trips really count by doing all my errands at once. I figure I was saving about $25 a week in gas alone, never mind the maintenance on my car.”

Then, when Jane’s car payments ended, she channelled the money into her savings. “I was spending $372.27 a month on my car loan. So I opened up another account and called it ‘Car Savings’ and ended up with $9,450 in it.”

Were there any downsides to her rabid savings plan?

Yup. There wasn’t a lot of going out. And because she took in a student as a roomie, there also wasn’t a lot of privacy. Was it worth it? “It sure was. My room- mate saved me $400 a month on my rent. And I saved about $270 a month on entertaining myself and my daughter, Julia, at home.”

“Let me guess,” I said. “Another savings account.” “Yes, ma’am,” Jane said. “How much?” “$6,880.” “You’re still a long way off $40K,” I said. “Not so long,” Jane said. “I had some help.” “Mom and Dad?” I asked. “Everyone I know,” she said, laughing. “I told anyone who would normally give me a present for my birthday or for Christmas to give me $20 instead to help me get the best present ever: a home of my own.” Another account? Yup. “I have wonderful parents who really wanted to help. My father had a huge garage sale and added it to my ‘House Savings’ account.”

How much? In all, $1,200 in two years. Nice family and friends! “How’d you come up with the rest?” “The usual: I only shopped for Julia in second-hand stores and didn’t buy very much for myself. I brown-bagged it at work, switched from coffee to tea and stopped buying books and renting movies. We spend every Saturday at the library. It’s entertainment and we get to bring home stuff.” “Well done,” I said. “Thanks,” she said, smiling. “I couldn’t have done it without you.”

Actually, she could have, but I was glad to have helped. Gail Vaz-Oxlade’s column appears each Tuesday in Smart Money.