Savings Part 3: Savings made simple
Having some money stored away is one of the best feelings I have ever had. I don’t crave being rich but I do crave feeling secure. Having a savings account buys me that security and makes me ready to face whatever challenges are thrown my way. The savings process may be slow and steady but it doesn’t have to be boring or painful. You have heard my outrageous claim that saving money can even be fun if you dream big and get excited over each drop in the bucket. It can also be easy if you keep it a priority and make it automatic. Here are some techniques to ensure you are getting the most out of, and enjoying, your savings journey.
Set Good Goals
When you set goals, I want them to be really specific. A good goal has three elements: result, motivation and due date. Which statement sounds more motivating to you?
I want to save money so I can buy new things when I need or want them.
I want to save $10,000 by May of 2021 to be ready to replace my aging car.
If you haven’t picked up on my preference, the answer is the second one. This statement has a specific dollar amount, by a specific date, for a specific purpose. I also want you to write your savings goals down and keep them in your wallet. This is a neat trick I learned to help me stay focused on my goals. Whenever I reach for cash or my debit card, I am reminded of my goals and it helps me rethink the purchase I am about to make.
Make it a Team Effort
Savings goals should involve all the members of your household. Especially if you and your partner have joint accounts, you need to be on the same page with the goal and what steps you are going to take to get there. If you have children living with you, involve them in your savings goals or help them set goals of their own. Even the younger members of your home can join in.
My young son could care less about the car replacement goal I have and he doesn’t understand the need for an emergency fund. But you know what he does understand? Disney World! In 2020 we are taking the kids to Disney for the first time and we have been trying to explain to our four year old that going to Disney costs a lot of money and that we need to save for it. His goal is to save $20 dollars or tickets as he calls them, by the time he is five years old to spend on toys at Disney World. He is four so I let him have that goal in mind but the real goal is for each kid to have $200 by January 2020 to spend on souvenirs at Disney. Whenever the kids get money in their birthday or holiday cards, they put it into their Disney spending money fund. My son gets so excited whenever he has another “ticket” to add to his piggy bank and he doesn’t ask to spend it on toys because he is motivated by the anticipation of Disney.
Try New Techniques
How can your family find a simple and painless way to save for your goals? We have discussed setting up automatic transfers from your checking to savings accounts. You can also set up a payroll deduction that goes directly to your savings. Perhaps when you get your next raise at work, set up a payroll deduction to have all or part of it put into savings. If you do this before your first paycheck with the increase and don’t change your current lifestyle, you won’t even notice the money is missing and you will be building a nice balance without breaking a sweat. You can also do this with any overtime or bonuses you receive. Take this another step further to keep yourself from spending the money by setting up a savings account at a different institution. This makes it a little more difficult to liquidate the funds. Your savings technique could even be as simple as a savings change jar in the kitchen.
Whatever your approach to savings, keep those goals in mind and search for ways to put money aside that makes it simple to build up your account.
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