As I’ve been writing about my journey to save enough money to take a sabbatical, you are probably wondering, “how is Sam going to save $100,000 to be able to take a year off of work?”

Honestly, that’s a question I am asking myself as well.

But, I have a plan.

First, let’s start high-level.

In order to save $100,000 in a year, here is how I could break the savings down:

- $274/day
- $8,333/month
- $25,000/quarter
- $33,333 three times
- $50,000 two times
- $100,000 once

Doing any of these things would allow me to save $100,000 in one year. Note that these don’t take into account any interest calculations.

This means either earning this much more per day, week, month, quarter, year or cutting expenses by that amount.

Or somewhere in between.

You’ve probably seen many writers break down savings like this before. It’s sort of helpful. However, it’s also not so helpful, particularly with a number as large as one hundred thousand dollars.

What if instead of making your goal to save a certain amount regularly, you break out large chunks of money that you know you might receive outside of your regular income? Then space out the rest.

This is how it will work for me.

**The Side Bucket Method**

I call this method the “Side Bucket Method.” Essentially you are taking certain chucks of money, bucketing them, and setting them aside.

I intend to save several large chunks of money, determine how much is left to reach my goal, and spread it out.

One of the reasons I think saving $100,000 in a year is achievable for me is because I know that I have company equity vesting in the next year (that I will be able to cash out). This will equal a large percentage of the number I need to save to reach $100k.

* Side Note on Long Term Incentive Plans (LTIP): *The equity that will vest for me this year is stock in the company I work for that I earn as part of my bonus each year. It is called LTIP. Here are some notes about LTIP:

- While I am awarded the stock as part of the bonus, it doesn’t actually vest (i.e. I don’t receive the stock) until a certain amount of time is up.
- For most LTIP, one-third or a fourth or even a fifth of the total award amount vests each year, but some awards are “cliff vesting.” This means that you have to wait until the entire time period is up (usually 3 or 5 years), and then you get all of the award.
- If you leave the company early, you get none of it.
- LTIP is one of the little-known benefits of staying at a company for a long time since, each year, you are essentially getting a large amount of income just for continuing to work there.

I’m also factoring in the prospect of a cash bonus from my work into my savings plan. Because I don’t rely on my bonus to pay my bills, I can save all of it.

I will also determine if I’m on track to get a tax refund. And what about a raise or cost-of-living adjustment? And birthday gifts, Christmas gifts, or other one-time gifts?

Additionally, I have an FSA childcare account where $5,000 gets withdrawn pre-tax over the course of the year for childcare expenses. Except I don’t withdraw this each week or month. Instead, I withdraw it all at the end of the year, so that’s another large bump. Note that with COVID, you may need to stop or change your dependent care FSA.

These different “side buckets” reach a total amount for me that makes the remaining amount an achievable amount to save and earn more each month.

## How to Save $100,000 to Take a Sabbatical

To use the side buck method to determine how you can save enough to take a year off, add up the following for yourself:

- Bonus Payments
- Raises
- Christmas, Birthday, Other Gifts
- Tax Refund
- FSA Childcare Payback
- Stock/Company Equity that will Vest
- Other Expected “Chunks” of Money

Now, take your overall sabbatical number and subtract the total of all of these “extra” incomes.

For me, I am assuming all of these amounts equal a little over half of my Sabbatical Fund amount, so this means I need to either cut $50k extra in costs over the next year or earn that much in side hustle income. I plan to cut a little in costs. That said, I primarily intend to try to earn more with a side hustle.

## Cutting Expenses to Save $100,000

Another way to help me reach my goal is to cut expenses. But, it would be impossible for me to cut costs enough to save $100,000. Instead, I plan to cut expenses to save about $150/month. The benefit of this is that I have to earn less in side income to start earning enough extra money per month to hit my goal.

Now, I don’t expect to immediately start earning hundreds of extra dollars/month. I expect my extra monthly income to look something like a series of one-time bumps — a power curve rather than a linear curve.

# How to Save $100,000 in Two Easy Steps

To sum up all of the above, here is how I intend to save $100,000 to take my sabbatical:

- Use the Side Bucket Method to set aside and save large one-time increases in income
- Figure out what is left and:
- Cut expenses
- Earn more (through a side hustle and by negotiating a raise at work)

## Customizable Downloadable Spreadsheet to Save $30k

I created a spreadsheet to get me to $100k, so I’ve modified it to be a spreadsheet to get to $30,000 in savings over the course of a year based on a $75,000 income. You can use this spreadsheet as well.

Specifically, this spreadsheet is unique because it allows you to incorporate large possible and probable one-time payments. It also factors in interest and tax. Lastly, it allows you to grow a side-income incrementally rather than evenly over the course of a year.

Here is a spreadsheet I created to help you save enough to take a sabbatical.

### Directions for Spreadsheet

- Scroll to the right and fill in the following fields:
- Your Salary
- Your Savings Goal
- Your Negotiated Raise
- Your Tax Rate
- Your Annual Cost of Living Adjustment/Raise (applied in March)
- How Much Extra Savings Per Month as a percent of salary you plan to save
- How Much You can Decrease Expenses Per Month (as a percent of your salary you plan to cut)
- Your Annual Bonus as a Percentage of Your Salary

If any of these aren’t relevant for you, insert 0.

- Scroll back to the left and fill in the following fields for each month:
**Extra Tax Refund**– This is the amount of tax refund you expect to receive (you’ll likely place one amount in March, April, or May).**Extra Gifts**– These are any cash gifts you expect to receive (likely to occur around the end of the year, holidays, or birthdays).**Extra FSA**– If you contribute to an FSA and you do a lump sum payback (likely to occur in January).**Extra Equity**– If you receive any company LTIP (not in a retirement account — don’t touch that), insert the amount in the months it will vest.

If any of these aren’t relevant for you, ensure that all cells in these rows equal 0.

- Scroll to the bottom of the Spreadsheet to line 16 and fill in how much you expect to earn extra from a side hustle or gig in column C16.

For the sake of this spreadsheet, I assume that you are starting from scratch, so the first month and won’t have any extra income. Then you can earn something in month two. After that, I assume that you can double it for the next few months. Until then, I assume growth of 10% month over after six months.

#### More on my Assumptions in the Spreadsheet

- The numbers in the sample spreadsheet are not intended to be relevant for 99.9% of the population (or the population who might download this spreadsheet). I know that earning $75k is a lot of money for most people. If you live in an expensive city or are supporting more than just yourself, the numbers reflected in this spreadsheet are not realistic. I could spend multiple posts discussing inequalities and privilege. Instead, I acknowledge this spreadsheet’s failings and ask your forgiveness if they don’t reflect your situation.
- That said, instead of picking the spreadsheet apart, use the numbers as a placeholder to reveal how a few key changes in your finances can make a significant difference in your ability to save a large sum of money for a goal. Namely:
- Negotiating a raise and saving it rather than spending it
- Starting a side hustle and then growing it
- Focusing on earning more rather than reducing expenses

*This post is part of our Sabbatical Sundays series. To read more, click here.*