I’ll Start Saving, Just As Soon As…

Of course you’ve heard that you need 3-6 months of spending money tucked away in a savings account – just in case.  And “someday”, you’ll start working on that.  Just as soon as you start making more money, and you’ve paid off the car, and paid down those credit cards, and… um… start making more money (did you say that one already?).

The problem with the idea of “just as soon as…” is that it is a sure fire strategy for disaster.  It’s called “procrastination”.  It doesn’t work – never has, never will.   Nobody likes to save.  Savings involves “delayed gratification”, and who wants to wait and hope you can enjoy your money later when you are absolutely certain that if you spend it today on a designer pair of jeans or a leopard-print steering wheel cover that you’ll enjoy it? 

But look around – the economy is becoming scary.  Unemployment is increasing.  Once “Too Big to Fail” companies have failed.  Once proud financial institutions and huge corporations have stocks trading in the pennies and the government is printing money at an alarming rate, telling us the solution to the crisis is to spend more money.

But the real solution is “Saving”.  Reduce spending and SAVE!  Don’t Delay – Start Today!  Great minds in history have warned us against delaying the building of our savings accounts.  Minds like:

• Benjamin Franklin (“Have you somewhat to do tomorrow, do it today.”) or
• Mark Twain (“Never put off until tomorrow what you can do today.”) or maybe
• God Himself (“In the house of the wise are stores of choice food and oil… THAT MEANS SAVINGS… but a foolish man devours all he has… THAT MEANS NO SAVINGS – Proverbs 21:20)

If you think the government is going to “bail you out” if you run in to trouble in the future, think again.  Start taking care of your own future – don’t be that “foolish man” God warns about.

I Don’t Have Enough Money To Even Start Saving…

Absolute nonsense.  You got change in your pocket?  The ashtray of your car?  That coffee cup above the washing machine?  Then you have enough to start saving.  Go open a savings account – even if all you have is two plastic baggies filled with loose change.  That’s the first step – that “journey of a thousand miles begins with a single step” first step.

Then COMMIT to adding to that account on a regular basis.  And by “commit”, I mean “figuring out a way to trick yourself” into doing it.  Because if you leave it up to your own good intentions, you won’t do it.  Here are some ways to “trick yourself”:

·        Make it automatic:  Have your bank automatically transfer a fixed amount every payday from your checking account to your savings account.

·        Make it automatic II:  Request that your payroll department direct deposit a percentage of your paycheck each month into your savings account and the rest into checking.  Many companies have started offering this service to employees – go ask!

·        Make it automatic III:  Contribute to your 401K.  If you’re not already in your company’s plan – start!  Start with 3% of your income – you won’t even miss it!

·        Make it automatic IV:  Go in to your payroll department and reduce your exemptions by 1 on your W-4 withholdings form.  That means your company will start withholding slightly MORE money each month from you.  It’ll go to the IRS, which will increase your tax refund next year.  (I know, EVERY other financial advisor tells you “Don’t let the IRS have your money – they don’t pay you interest on it”.  But if you’re not saving anything now – can you think of a safer place to park your savings each month?  You CAN’T spend it, and you’ll get a lump sum back next year.  Just commit now to how you’ll use this lump sum to save for the future.)

·        Make it automatic V:  Save your change.  Many banks offer a “keep the change” program with your debit card purchases where they round up each purchase to the next dollar and put the rest into your savings account.  Cool!  And put a big jar next to where you empty your pockets when you come home, and put all your change into it – and once a month, add it to your savings.

And some other ideas:

• Make it inconvenient to access:  Just like you might have to put your alarm clock across the room so you actually have to get out of bed to turn it off, if it’s too easy to access your savings – you’ll just end up spending ‘em.  Maybe you need to set up your savings account at a different bank?  I LOVE these new on-line banks, like ING DIRECT.  They pay a great interest rate, they’re safe, and you have to go out of your way to access your money – which isn’t hard to do, it’s just slightly inconvenient so maybe you’ll think twice before you dip in to your account so you can buy those designer jeans.
• Give the account a “goal” name:  Use names like “Emergency Fund”, “Vacation Fund”, “Kid’s Education Fund”, “Christmas Fund”, “New Home Fund”, etc.  Taking money out of your “savings” account is easy.  Taking money out of your “Start My Own Business and Fire My Boss” account to pay for something frivolous might be enough deterrent to keep your spending in check.

Saving a few bucks every day may not seem like much when you first start out, but those few bucks grow as long as you can keep your fingers out of the cookie jar.  And when it begins to become a sizable amount – you’ll actually start sleeping better and feeling better about yourself.  And if you can resist the temptation to blow it on something you don’t need – you may be able to enjoy that thing you’ve heard of, called “Peace of Mind”.

Related Articles:

• Is This Necessary? Evaluating Your Everyday “Latte” Purchases to Save Money
• Your Financial Bucket List
• Are YOU Spending Wisely, or Emotionally?
• Can You Get Out Of Debt By Eating Better?
• S.P.F. Your Debt – A Formula to Pay Off Your Debts Without Getting Burned

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