Wow – it’s already a week into 2017; and this year we’re really going to get our finances straight. It’s a common theme, yet something happens and more often than not nothing changes. It’s tough, overcoming what has become – whether you want to admit it or not – a habit. Much like quitting smoking or dieting, there are frequently reasons you can’t save “yet”. Welcome to life; where curve balls seem to be the order of the day – so what can we do?
First, as I’ve said in the past we need to be realistic about what we want to accomplish. If you’ve had difficulty saving large sums, be it for retirement or other goals; don’t try to play catch up. Start small – after all I haven’t seen any toddlers winning marathons or reciting the Gettysburg Address; the same is true for saving. In the beginning it’s more about changing behaviors than how much you can put aside.
Identify what you are doing, or not doing, that you don’t like. What don’t you like about it? Why don’t you like it? Is it something you WANT to change? Is it something you feel you have the power to change? For example, feeling your spouse or significant other spends too much money on their hobbies is not something you have total control over, and not where I would recommend starting. If instead your goals were to (1) lose a little weight and (2) save more money; I would have you look at what you do for your meals. This is a great opportunity to meet both goals using the same solution – making yourself lunch. You are in control of what you eat, and how much you are spending to make those meals.
But if you’ve been eating out every day of the week, stopping cold turkey may not be the most successful strategy. Instead, commit to bringing your own breakfast/lunch/dinner one day each week. It’s much easier to follow through creating more opportunities for success. In 4 months time add a second day, and so on until you’ve reached your desired end state. The trick is giving yourself enough time to make it a habit – indicated by you no longer thinking about it.
If you don’t know where to start – pay yourself for the chores you’re doing around the house. For example – you decide you’re going to pay yourself $20/hour (keeps the math simple). Doing the day’s dishes takes 15 minutes – so you’ve just earned $5. Laundry for the week takes 30 minutes (loading/unloading/folding & putting away clothes – don’t count the time the machines take unless you’re doing it by hand) – you’ve just made an additional $10. At the end of the week add it all up and pay yourself.
You don’t even need to have physical cash. Open a new savings account and at the end of the week tally up what you’ve done and transfer the money into this new account. Don’t get a debit card for the account, just leave it alone – at the end of the year take 25% of what you’ve saved and treat yourself to something. Heck – if you have a spouse or significant other team up, offer to pay each other. : )
In my opinion this rewards you for doing something you may not want to do and makes the activity of saving easier. Putting the money in a new account without ready access will help curb the desire to spend it. The important thing is consistency. Once you decide on what you’re going to do, you need to follow through; otherwise it will not become a habit.