Let’s get a little taboo for a second, shall we?
Most people don’t like to talk about money. There’s stigma, there’s shame, there’s guilt, there’s pride, there’s comparison, there’s pity, there’s jealousy… the list goes on. But today I want to share a little of my journey into saving my pennies, and that requires some #realtalk about moolah.
I was blown away when I recently read this article.
Saving money is such an integral part of my life these days that I could barely believe the statistics. But then I started reflecting on my budgeting journey and thought you know what, if I hadn’t found the tools or discipline that I did, I may have very well ended up there too. Well-intentioned and broke.
Allow me to paint a picture. Seventeen-year-old Kira sits at the dining room table with her laptop in front of her, preparations for college in full-swing. Her mother is kindly explaining the importance of a budget and walking her through how to create one. Meanwhile, Kira is sobbing into her keyboard trying to figure out what fancy words like “income” and “debit” mean. It wasn’t pretty.
Fast-forward to modern day and I can proudly say I do a fairly decent job of saving money. Do I wish we could save more? Of course. But we’ve managed to strike a balance between squirreling away some dollars and not feeling totally deprived of a life well-lived.
So what changed? Well I’ll tell you. There are two main tools I rely on (neither of which have paid me to write this post).
Disclaimer: I am not a financial advisor, nor do I pretend to be. This is not advice. These are simply some tools and tricks I’ve used with success. Do with them what you will. Carry on.
TOOL #1: A Budget
I’ve been using Mint for about five years now and really love it. It’s so helpful to be able to categorize my spending and to see it reflected in a pie chart (#nerd). You can also input your monthly expenses here and they’ll generate a handy little bar graph letting you know when you’re approaching your spending limit.
TOOL #2: Automatic Savings Plan
This has been the real game-changer for me. Once we set up an automatic savings plan, we could sit back and hit cruise control. An automatic savings plan might sound big and scary, (it did for me) but let me assure you, it is not. We use Capital One 360, but there are many options to choose from. Basically, you link up your checking account, create a new savings account, and set up an automatic withdrawl from the former to the latter each month. The best part about automatic savings is that you can factor it into your budget just like any other expense. It’s no longer a burdensome “choice” to save, it’s just part of your monthly expenses. (Tip: If you schedule your automatic withdrawl for the same day your paycheck is deposited, then it’s sort of like you never even see it. It just goes directly into savings.)
I’m a big fan of Dave Ramsey‘s Zero-Dollar-Budget. The concept is to budget your monthly expenses down to the last dollar, so there’s no “wiggle room” left. The “wiggle room” is what always got me into trouble in the past. I’d just look at my account and think oh I’ve got enough to pay my expenses and then some, so I can definitely afford these shoes. Do that three times in a row and suddenly you’ve surpassed your buffer and eaten into your grocery budget. When every extra expense is coming out of what little is left, it quickly adds up. Instead, I like to appropriate funds, no matter how small, for each category.
We pay cold, hard, cash. Ok, maybe not cold or hard, but we typically reach for our debit card instead of swiping our credit card. Credit cards can be a great financial tool for some people, but for many they can be the downfall of financial responsibility. For us, it’s easier (most of the time) to pay with cash. There are always exceptions to this rule, but we generally abide by it.
Creativity is key when you’re trying to live within your means. We like to find fun projects or activities that have a low or zero cost factor. (It’s easy when you live in an amazing city with so much to offer!)
I also have to say, having someone to be accountable to has made me the best financial version of myself possible. I know some couples who opt for splitting their finances, and that is a great option for lots of folks. For me, I appreciate being accountable to Tom (and ultimately, to myself). We value transparency in our finances and make 99% of monetary decisions together. That’s not to say you should run out and open a joint checking account tomorrow. Maybe you can be accountable to someone other than your partner. Do you have a girlfriend who’s trying to pinch pennies too? Why not put together a budget and check in with each other once a month? I know it’s helped me so much to have a partner in this.
I could go on and on about my Cinderella-like transformation from broke college kid to saver-extraordinaire, but this post is long enough already and it’s FRIDAY. I’m interested to hear any other tips and tricks for saving money out there, so share some of yours in the comments! And wish me luck you guys, because SUNDAY IS THE BIG DAY!!!
Ok, happy weekend-ing, bye now.