In light of the fact that my exercise in general has been much more lackluster than I would have liked (lazy? lack of willpower? outside circumstances? who knows....), I recently decided to issue myself a challenge for the month of April. The goal is to get back on the bandwagon and keep going and to help get more consistent in general again and I always find that a self-issued challenge helps give me focus and something to work toward for improvement.
So my personal challenge to myself is this: In the month of April, I will get to BARE MINIMUM 100 miles, whether it is through regular walks, the elliptical, classes, or general everyday movements--or more likely, a combination of various things--I will make sure to hit at least 100 miles by end of day April 30th. That's roughly 3.3 miles a day on average, which is absolutely doable, and I suspect that I will get much more, but for the sake of a realistic and attainable goal, I chose the conservative number of 100 Miles.
For Tracking and accountability, I will be posting this here and on my social media so people can check in and see how I am doing.
Are you interested in joining the challenge with your own numbers? Are you looking for some accountability and support? Even if your goal is much smaller, come on down! And just because I called it the "Fitbit" Challenge, that is just because what I will be using to track it (and I am not affiliated with them), but if you have another method to track, that's welcome too! Please feel free to comment below and tell me your own personal challenge!
Update 3/21/2015: Since I'd like people to participate, I changed the name of the post from "Fitbit Miles Challenge" to Simply "100 Miles Challenge".
Tuesday, March 31, 2015
Friday, March 13, 2015
Book Revew: Why Smart People Make Big Money Mistakes
I finished reading the book Why Smart People Make Big Money Mistakes and How to Correct Them; Lessons from the New Science of Behaviorial Economics By Gary Belsky and Thomas Gilovich about a week and a half or two weeks ago and wanted to share some thoughts. This was the book that I was trying to get from the library when I checked this one out, but the latest version wasn't available so I got the other one. Then I decided that it would be a worthy read even if it is not the latest edition, then it became a matter of waiting for it to become available, which is always the hardest part.
As the name implies, this book talks not only about some money issues that people face, but also tries to offer some practical advice on how to change your behavior or habits to resolve those issues. I found the book to be a pretty easy, and quick, read with some interesting insights. Here are some things from the book that may be helpful:
One quote that I liked in the book's introduction was "Sometimes people make mistakes because they behave like sheep, and sometimes they err because they behave like mules." In context, the authors say this because they are talking about how they will discuss both blindly going with the crowd on decisions, and how to avoid stubbornly going against things, even if would be good to go with it. But this line stuck with me because it really can apply, like many concepts in the book overall, to more than just money decisions.
Here are some concepts that were discussed, and their relevant tips that may help you if you do any of these:
-Mental Accounting, which is the tendency to treat money differently based on the source it comes from or what it is intended for, or to spend more on credit than you would with an outright cash purchase. As the authors point out, this can be very beneficial when it comes to making sure bills get paid because you have money set aside that won't get spent on random things, but not so beneficial when you treat windfall money differently than money you earn. (An example they give is a fictional woman who was a savvy investor with her own money who got an inheritance from her grandmother and refused to invest because her mental accounting viewed "Grandma's Money" as more sacred than her own. Her lack of investing that money would cost her thousands in gains over the years.)
I know that I personally do some creative mental accounting (such as multiple savings accounts for different goals), but I try to keep it to the positive form of it (since all bills ARE paid, savings and investments are being funded, etc.), but if you do this and it's the not-so-positive version, they give recommendations like remembering that every dollar spends the same (so don't hold onto money from one source more than another), and using mental accounting to your advantage by using payroll deductions/direct deposit for savings, etc.
-Decision Paralysis- I've also seen this called Analysis Paralysis before, which I think sounds more interesting, and we ALL know what that is: Too much information means it's hard to make a choice or decision, and often we end up not doing anything for a while, if at all. Not like I would know anything about that... In addition to discussing some methods on how to deal with this (Like Automated investments, and reframing things in your mind to be more about what to REJECT rather than SELECT), they also started the chapter that discusses this by quoting Rush's Free Will; "If you choose not to decide, you still have made a choice." And, really, how can you go wrong by quoting an awesome Rush song?
The book also discusses and attempts to help on several other things like Loss Aversion Mentality, Overconfidence, Confirmation Bias and more. Overall, I think this is a very worthwhile read. I really like that the authors give easily digestible, and more importantly, actionable ideas on improving money situations (and as you read it and think about it, other areas of life, too).
This was the first version of the book, from 1995, so I don't know how much is different in the newer edition(s), but I am sure it would be just as beneficial (if not more so) as this one. If you are interested in this sort of information, I would recommend giving this book a peek.
As the name implies, this book talks not only about some money issues that people face, but also tries to offer some practical advice on how to change your behavior or habits to resolve those issues. I found the book to be a pretty easy, and quick, read with some interesting insights. Here are some things from the book that may be helpful:
One quote that I liked in the book's introduction was "Sometimes people make mistakes because they behave like sheep, and sometimes they err because they behave like mules." In context, the authors say this because they are talking about how they will discuss both blindly going with the crowd on decisions, and how to avoid stubbornly going against things, even if would be good to go with it. But this line stuck with me because it really can apply, like many concepts in the book overall, to more than just money decisions.
Here are some concepts that were discussed, and their relevant tips that may help you if you do any of these:
-Mental Accounting, which is the tendency to treat money differently based on the source it comes from or what it is intended for, or to spend more on credit than you would with an outright cash purchase. As the authors point out, this can be very beneficial when it comes to making sure bills get paid because you have money set aside that won't get spent on random things, but not so beneficial when you treat windfall money differently than money you earn. (An example they give is a fictional woman who was a savvy investor with her own money who got an inheritance from her grandmother and refused to invest because her mental accounting viewed "Grandma's Money" as more sacred than her own. Her lack of investing that money would cost her thousands in gains over the years.)
I know that I personally do some creative mental accounting (such as multiple savings accounts for different goals), but I try to keep it to the positive form of it (since all bills ARE paid, savings and investments are being funded, etc.), but if you do this and it's the not-so-positive version, they give recommendations like remembering that every dollar spends the same (so don't hold onto money from one source more than another), and using mental accounting to your advantage by using payroll deductions/direct deposit for savings, etc.
-Decision Paralysis- I've also seen this called Analysis Paralysis before, which I think sounds more interesting, and we ALL know what that is: Too much information means it's hard to make a choice or decision, and often we end up not doing anything for a while, if at all. Not like I would know anything about that... In addition to discussing some methods on how to deal with this (Like Automated investments, and reframing things in your mind to be more about what to REJECT rather than SELECT), they also started the chapter that discusses this by quoting Rush's Free Will; "If you choose not to decide, you still have made a choice." And, really, how can you go wrong by quoting an awesome Rush song?
The book also discusses and attempts to help on several other things like Loss Aversion Mentality, Overconfidence, Confirmation Bias and more. Overall, I think this is a very worthwhile read. I really like that the authors give easily digestible, and more importantly, actionable ideas on improving money situations (and as you read it and think about it, other areas of life, too).
This was the first version of the book, from 1995, so I don't know how much is different in the newer edition(s), but I am sure it would be just as beneficial (if not more so) as this one. If you are interested in this sort of information, I would recommend giving this book a peek.
Thursday, March 12, 2015
Some Recent Smart Decisions In the Buff Millionaire House
Recently, the husband unit and I have been going through things and making changes that eliminate waste or will save us money, or both. (Well, mostly me and he just goes along with it, because try as he does, when it comes to finances, his eyes glaze over and he cannot focus/absorb it. But he does other things to help.) Here are some things that have been changed around or refocused to help cut things down, in no particular order:
-I set up a non tax-tax advantaged joint investment account for us in addition to the Roth IRAs I had set up previously, so that our money can start to grow for us. I funded this with $25 just to start because I have not yet decided from which of our savings account this will be funded. But, as with anything, the most important part is getting started since things can always be tweaked or streamlined later.
-We ditched our Hulu Plus account. We realized (or rather, re-realized as we had come to the conclusion before but didn't do anything about it) that we watched MAYBE three shows through Hulu Plus, and those shows were available through the free version so we could just use the HDMI Cable to watch them when available. So long, $8/month wastefulness! I currently have this amount auto-transferred to our main savings account on the day of the month that it usually debited from. After all, what is the point of saving an expense if you are not actually Saving the money?
-I realized that since the car is paid off, and it was only the lien holder that required comprehensive and collision coverage, I went online and changed coverage to eliminate those, which will save us approximately $15/month, starting on the April 20th billing. (I assume it's so far from now because of the renewal cycle...) And, like above, once it starts deducting less, I will have the savings auto-transferred on the day the bill hits. The next thing will be to call up the insurance company for renter's insurance (since changes can't be made online) and see what changes can be made there, if any.
[Related Side Note: Changing your insurance coverage or deductibles is a very easy way to save money, and one I would recommend very highly. If, for example, you have a $250 deductible for car insurance, bumping it to $500 or $1000 could help save you some serious money over the long term. And this can apply to all insurance that you carry. As you save more money and have enough in savings to cover those eventual (and usually unlikely) deductibles, change as many as you can and the savings should start to add up.]
-Not yet implemented, but I had the idea that instead of depositing checks into checking and transferring things to savings, that I would instead reverse it and deposit every thing into the main savings account and then once a month, transfer the monthly bill/expense budget to checking. The Other Half worried that since his unemployment checks get direct deposited, and they were not exactly speedy in getting it right the first time, that it would mess that up. I initially agreed with this sentiment, but I think it may be worth looking into again. Especially since, as it currently stands, a certain amount is direct deposited into checking for bills and what's left over gets deposited to savings, but because the way bill cycles work, some things have to come from savings as a debit and then when the weekly check that covers it comes through the money gets transferred back to savings. By changing everything to savings and then just a flat amount once a month to checking, it should help eliminate the confusion and time spent transferring money BACK to savings, and allow me to see at a glance where things stand and less math involved. (What can I say? I am lazy and anything over 5 minutes a month spent balancing numbers is excessive.) So we'll have to see what we can do on that. Worst case scenario is that we just deal with the weird back and forth for a bit longer and just start fresh when he gets a new job.
So those were some small changes and reductions in wastefulness we made recently. For the two service changes, we'll save at least $22/month, for less than 15 minutes total work. Now THAT is a nice return on investment.
Have you made any "small" changes recently that will turn into big results, or any other smart decisions for your finances lately? Comment below with your experiences!
-I set up a non tax-tax advantaged joint investment account for us in addition to the Roth IRAs I had set up previously, so that our money can start to grow for us. I funded this with $25 just to start because I have not yet decided from which of our savings account this will be funded. But, as with anything, the most important part is getting started since things can always be tweaked or streamlined later.
-We ditched our Hulu Plus account. We realized (or rather, re-realized as we had come to the conclusion before but didn't do anything about it) that we watched MAYBE three shows through Hulu Plus, and those shows were available through the free version so we could just use the HDMI Cable to watch them when available. So long, $8/month wastefulness! I currently have this amount auto-transferred to our main savings account on the day of the month that it usually debited from. After all, what is the point of saving an expense if you are not actually Saving the money?
-I realized that since the car is paid off, and it was only the lien holder that required comprehensive and collision coverage, I went online and changed coverage to eliminate those, which will save us approximately $15/month, starting on the April 20th billing. (I assume it's so far from now because of the renewal cycle...) And, like above, once it starts deducting less, I will have the savings auto-transferred on the day the bill hits. The next thing will be to call up the insurance company for renter's insurance (since changes can't be made online) and see what changes can be made there, if any.
[Related Side Note: Changing your insurance coverage or deductibles is a very easy way to save money, and one I would recommend very highly. If, for example, you have a $250 deductible for car insurance, bumping it to $500 or $1000 could help save you some serious money over the long term. And this can apply to all insurance that you carry. As you save more money and have enough in savings to cover those eventual (and usually unlikely) deductibles, change as many as you can and the savings should start to add up.]
-Not yet implemented, but I had the idea that instead of depositing checks into checking and transferring things to savings, that I would instead reverse it and deposit every thing into the main savings account and then once a month, transfer the monthly bill/expense budget to checking. The Other Half worried that since his unemployment checks get direct deposited, and they were not exactly speedy in getting it right the first time, that it would mess that up. I initially agreed with this sentiment, but I think it may be worth looking into again. Especially since, as it currently stands, a certain amount is direct deposited into checking for bills and what's left over gets deposited to savings, but because the way bill cycles work, some things have to come from savings as a debit and then when the weekly check that covers it comes through the money gets transferred back to savings. By changing everything to savings and then just a flat amount once a month to checking, it should help eliminate the confusion and time spent transferring money BACK to savings, and allow me to see at a glance where things stand and less math involved. (What can I say? I am lazy and anything over 5 minutes a month spent balancing numbers is excessive.) So we'll have to see what we can do on that. Worst case scenario is that we just deal with the weird back and forth for a bit longer and just start fresh when he gets a new job.
So those were some small changes and reductions in wastefulness we made recently. For the two service changes, we'll save at least $22/month, for less than 15 minutes total work. Now THAT is a nice return on investment.
Have you made any "small" changes recently that will turn into big results, or any other smart decisions for your finances lately? Comment below with your experiences!
Friday, February 27, 2015
Fitness Check-In
I recently did a check-in for the financial side of my quest, and realized that it had been sort of a while since I had updated on the fitness side, so I thought I'd do a quick rundown:
Current weight: (as of last weigh in on Sunday 2/22) 180.4 pounds--Just a mere 10 pounds from my originally stated goal weight of 170! So I am very excited about that. I had, due to holidays and general less-exercise-than-usual, had been stuck at 181-184 for a while, so it's nice to finally break that, if even by a little. I expect that if I stayed consistent and maybe even work just a bit harder, I could be around 170 by Mid-March or so. Since I am happy/comfortable when my old clothes in my closet fit, and this doesn't require an exact number on the scale (after all, that number doesn't account for muscle anyway), I am confident that I will be there very soon. (And I guess I better start trying on said clothes semi-regularly to see how I am doing...)
Fitness Levels compared to goals:
Running: ehhhh... it's been a while since I have ran consistently, so I am not sure what it would be. I know that six months ago on my birthday, I said that by 29, I'd like to run 10 miles, but I haven't been working on that. Hmmm. I wonder if I could get to that level in time. That's 6 months (give or take a few days) away, so maybe. Though, lately I have taken to a mindset to not set such specific goals because I get very upset when I don't meet (or beat) them, which can cause me to get demotivated and lose sight of the bigger picture that being healthy and strong will be a lifelong journey and accomplishment. Not to say that goals are not important, they definitely are, but I feel it's also important to not beat myself up over it as long as I am working on it. (Sitting around being lazy and not working on anything, on the other hand, is fair game for me to beat myself up for....)
Weights: (Current Max weights)
Squats: 135 Pounds
Deadlifts: 115 Pounds
Bench: 75 Pounds
Pushups: I am up to about 40 wall-based pushups, though have not worked on it in about 2 weeks.
Shoulders: 20 Pounds each hand (40 total)
-Not currently working on pull-ups/lat pull downs, clean and press, or isolated muscles (other than shoulder press) as husband and I are currently working on a 5*5 program to up our strength. (Which will be it's own post here in the future.)
So that's where I am currently--making some pretty decent progress all told. How are you doing with your goals. Please weigh in (no pun intended) below in the comments!
Current weight: (as of last weigh in on Sunday 2/22) 180.4 pounds--Just a mere 10 pounds from my originally stated goal weight of 170! So I am very excited about that. I had, due to holidays and general less-exercise-than-usual, had been stuck at 181-184 for a while, so it's nice to finally break that, if even by a little. I expect that if I stayed consistent and maybe even work just a bit harder, I could be around 170 by Mid-March or so. Since I am happy/comfortable when my old clothes in my closet fit, and this doesn't require an exact number on the scale (after all, that number doesn't account for muscle anyway), I am confident that I will be there very soon. (And I guess I better start trying on said clothes semi-regularly to see how I am doing...)
Fitness Levels compared to goals:
Running: ehhhh... it's been a while since I have ran consistently, so I am not sure what it would be. I know that six months ago on my birthday, I said that by 29, I'd like to run 10 miles, but I haven't been working on that. Hmmm. I wonder if I could get to that level in time. That's 6 months (give or take a few days) away, so maybe. Though, lately I have taken to a mindset to not set such specific goals because I get very upset when I don't meet (or beat) them, which can cause me to get demotivated and lose sight of the bigger picture that being healthy and strong will be a lifelong journey and accomplishment. Not to say that goals are not important, they definitely are, but I feel it's also important to not beat myself up over it as long as I am working on it. (Sitting around being lazy and not working on anything, on the other hand, is fair game for me to beat myself up for....)
Weights: (Current Max weights)
Squats: 135 Pounds
Deadlifts: 115 Pounds
Bench: 75 Pounds
Pushups: I am up to about 40 wall-based pushups, though have not worked on it in about 2 weeks.
Shoulders: 20 Pounds each hand (40 total)
-Not currently working on pull-ups/lat pull downs, clean and press, or isolated muscles (other than shoulder press) as husband and I are currently working on a 5*5 program to up our strength. (Which will be it's own post here in the future.)
So that's where I am currently--making some pretty decent progress all told. How are you doing with your goals. Please weigh in (no pun intended) below in the comments!
Friday, February 20, 2015
Book Review: Nudge
I recently finished reading (yesterday, actually) Nudge: Improving Decisions for Better Health, Wealth, and Happiness by Richard H. Thaler and Cass R. Sunstein. Here are some of my thoughts on it:
If you are unaware, Nudge is about, as the back cover says, "Choices-how we make them and how we're led to make better ones." It addresses common problems, such as savings rates for retirement, making better health decisions, reducing environmental impacts and a few other things where choices could be made better. They talk early on about nudges come from what they call "Libertarian Paternalism" and "....Influencing Choices in a way that will make the choosers better off, by their own judging." In other words, they want to make it easier for people to make better choices.
Some interesting points made in the book:
If you are unaware, Nudge is about, as the back cover says, "Choices-how we make them and how we're led to make better ones." It addresses common problems, such as savings rates for retirement, making better health decisions, reducing environmental impacts and a few other things where choices could be made better. They talk early on about nudges come from what they call "Libertarian Paternalism" and "....Influencing Choices in a way that will make the choosers better off, by their own judging." In other words, they want to make it easier for people to make better choices.
Some interesting points made in the book:
- No matter how much we believe otherwise, we are all "Sheeple" (my words, not theirs) and are prone to being influenced by other people or outside factors, even if unconsciously.
- Because we do crave approval from others or want to do what others are doing , if people are doing something that is good/better than others, it is best not to tell them so. A line from the book that I liked on this subject was: "If you want to nudge people into socially desirable behavior, do not, by any means, let them know that their current actions are better than the social norm." An example they give on this, is people in a certain city/neighborhood being given information on their energy use in comparison to their neighbors', and those that were told their use was lower than the average use, their consumption went up but those who were told that their use was higher than average brought theirs down. But when given either a smiley face or frownie face for good/bad usage, those with good usage didn't tend to change to a higher consumption. So, overall, don't tell people if they are doing better than average or normal.
- For Increasing people's retirement savings rates, they propose employers have automatic enrollment into retirement plans for employees, with an opt-out option instead of the current opt-in that most employers have currently. The authors also talk about an idea, "Save More Tomorrow", which automatically increases the contribution account at a set time frame (e.g every 6 months). I think this is a great idea, and if implemented by more companies (some already do), it could really help reduce the crises of people not being prepared for retirement and not having enough from social security.
- Speaking of Social Security, the authors talk about how Sweden had semi-privatized Social Security by setting aside part of the fund into investment accounts for individuals and allow them to select the investments or to use the default fund that was selected by experts. I think this idea is really interesting. People have to pay social security tax anyway, so to have a chance to have a say in how it is accumulates/grows is quite a concept. I would really be interested in learning more about this...
- One other Nudge that I found interesting was, in relation to increasing organ donorship, the authors talk about a mandated choice program (being required to choose whether your answer is yes or no), and mentions how Illinois has a similar program in place already where when at the DMV you have to select if you are a donor or not before the license can be renewed/etc. If you say yes, they will advise you that family cannot override this and if you would like to reconsider. I find this to be an interesting concept because it helps for the greater good (more organ donations) without intruding on people's right to decline to be a donor, and makes it convenient--which is the entire point of a NUDGE.
Saturday, February 7, 2015
Financial Check-Up
Last week, I FINALLY set up both mine and hubby's Roth IRA, with automatic funding of $50 each monthly. Why in the holy hell did I not do this before? Well, to be honest, I was in the "I know I should do it but don't know what to do, so do nothing" phase. Which, when I think about it, is very interesting, considering I set up the 401Ks and set them with lifecycle funds so that it at least could grow while I/we figured out what we should do with it, but for some reason that same logic didn't carry over to setting up the IRA account.
But the important thing is that it is at least set up NOW, and that it will be (with $50/month) an extra $600/year for each of us ($1200 total) that will go towards investment and savings. Of course, every little bit adds up, and we'll be looking for ways to add even more to it as we go on. But now we have to figure out what we'll do with the accumulated funds. I guess that will be my next reading material or quest.
I figured since that is finally set up, now is as good a time as any to do a progress report and see where I stand, at least financially. So, here we go:
Savings (between all accounts): ~$2500
401k: Mine is about $1100, but was transferred by previous employer to a rollover IRA. (And I need to set up 401k with current employer, even though it doesn't offer a match, but need to call because they had trouble finding my info in the online verification system.) Hubby's is about the same, but has not yet been rolled over that we are aware of.
Car Payment: $0 as I mentioned recently in the end of year check in, here. Woohoo!
Roth Ira: $50 start in mine, $50 start in hubby's.
Credit Card: $150ish. Wait...what? I thought that was taken care of already. (Small charge of buying tickets to a play and needing to transfer the funds from the fun account.) Looks like I'll be shifting funds from one savings account this week. Ooops.
Net Worth: $3650 if counting only mine/$4800 total including Husband's. Minus $150 for that Credit card, means $3500/$4650. This is about $1700 more than the total in the Starting Numbers, and that included the money in checking (which I intentionally didn't include in this one since it is so fluid in and out). So while progress may be somewhat slow so far, the important fact is, progress is definitely being made. Now to find some ways to add even more to savings and investments.....
So that's where I currently stand. Not too bad, but can definitely be improved upon. We've been thinking of ways we can cut costs and get rid of wastefulness, but things can be hard when it's only me working right now (and making just about $23,000). So since husband is still unemployed, and all things considered, we're doing really well. So I just know that when Shaun is employed, we will be socking away even more and doing even better, and I am excited to see things grow and can't wait to see where the journey takes me.
But the important thing is that it is at least set up NOW, and that it will be (with $50/month) an extra $600/year for each of us ($1200 total) that will go towards investment and savings. Of course, every little bit adds up, and we'll be looking for ways to add even more to it as we go on. But now we have to figure out what we'll do with the accumulated funds. I guess that will be my next reading material or quest.
I figured since that is finally set up, now is as good a time as any to do a progress report and see where I stand, at least financially. So, here we go:
Savings (between all accounts): ~$2500
401k: Mine is about $1100, but was transferred by previous employer to a rollover IRA. (And I need to set up 401k with current employer, even though it doesn't offer a match, but need to call because they had trouble finding my info in the online verification system.) Hubby's is about the same, but has not yet been rolled over that we are aware of.
Car Payment: $0 as I mentioned recently in the end of year check in, here. Woohoo!
Roth Ira: $50 start in mine, $50 start in hubby's.
Credit Card: $150ish. Wait...what? I thought that was taken care of already. (Small charge of buying tickets to a play and needing to transfer the funds from the fun account.) Looks like I'll be shifting funds from one savings account this week. Ooops.
Net Worth: $3650 if counting only mine/$4800 total including Husband's. Minus $150 for that Credit card, means $3500/$4650. This is about $1700 more than the total in the Starting Numbers, and that included the money in checking (which I intentionally didn't include in this one since it is so fluid in and out). So while progress may be somewhat slow so far, the important fact is, progress is definitely being made. Now to find some ways to add even more to savings and investments.....
So that's where I currently stand. Not too bad, but can definitely be improved upon. We've been thinking of ways we can cut costs and get rid of wastefulness, but things can be hard when it's only me working right now (and making just about $23,000). So since husband is still unemployed, and all things considered, we're doing really well. So I just know that when Shaun is employed, we will be socking away even more and doing even better, and I am excited to see things grow and can't wait to see where the journey takes me.
Thursday, January 22, 2015
14 Ideas to Start Your Nest Egg
(This post comes at the beginning of the New Year which is when people are making resolutions, but that was not my intent. Just a happy coincidence there, so... Happy New Year! Hope your 2015 is going well so far.)
I was thinking about the processes of saving money and how people struggle with doing so, so I wanted to share some tips/ideas on how to get started. Granted, now that I have an understanding of more financial things than I did, I still believe that "Big Wins" (investing well, automating, etc.) are a great way to do things. But on the same level, I understand that sometimes, working on something like that can feel like a stretch at best and impossible at worst, if you can't even get some basic money in the bank-believe me, I get it.
So if you need a few Small Victories to help you feel like it is possible to get started, here are some things I find to be helpful to get STARTED in your savings goals, in no particular order. A lot of these I have used personally, and some of them I have seen around that I think could work for people.
Use as many or as few as your tolerance allows (allowing you to still enjoy life, and not spend every waking moment obsessing about the next thing to cut), and soon you'll find that you're starting to build a nice nest egg. I'd even wager that you'll start to see your own creative brand of saving money emerge and come up with other ideas, all your own. Good Luck!
1. Starting very basic: Save $1/day. At the end of a year, you'll have saved $365. (Or, more accurately, $365 and some random change if you have the savings in an interest-bearing account.) I truly believe that ANYONE can save one dollar a day. Mastering the idea of saving small amounts when you don't have money or are just getting started is extremely important too-because if you are not in the habit of saving and managing finances with nothing, having money won't change that, and can lead to some very bad money habits that are harder to correct when you DO have money. $1/day is a great way to start a good habit in a sustainable way.
2. Conversely, there is the Savings Money Jar idea that people have been using. In this, you save progressive amounts each week, starting with $1 the first week, then $2 the second week, etc., to the point where you save $52 in the last week, so at the end of the 52 weeks, you'll have saved $1378. That's a nice chunk of change to add to the nest egg, and of course, if you're able, you could always ramp it up to save more each week, as well. One thing though: While most/all of the links that talk about this use a Jar, PLEASE put the money in a savings account and not on your counter/in a jar where it's too easy to be tempted to spend it...
3. Round Your Funds. One Thing I have always is to round up and down on funds, down on deposits and up on expenses. For example, if a purchase is $3.50, I will say it's $5 in my tracking. Conversely, if I make a deposit of $100, I will note it as $95. If you use this method, it will create a cushion for your account, in amounts that may be a pleasant surprise for you. After a certain period of time (once a month, once every week, whatever works for you), transfer the cushion amount to savings.
4. Brown bag your lunch. This seems like an obvious choice, but one that many people don't take advantage of. Of course, bringing your own lunch is definitely less expensive than buying it every day. This also has the advantage, from a fitness standpoint, that you can control what is in your meal and the portions. Win, win if you ask me.
5. Do you shop at a grocery store that puts the "You saved XX Today" on the receipt? Transfer that amount to savings when you get home. True, it may only be a few dollars, but every little bit adds up. This also works well with the rounding technique I use above for things. If your budget for groceries is $50/week and you only spend $46, that $4 could be transferred to savings to help add up.
6. When I finally automated finances (in a better way since it had always been auto pay, etc.), I set up Separate bill/spending accounts and 7. Separate savings/spending accounts. So Three Accounts total (in reality, more than that because, as I've mentioned before, I have at least 3 saving accounts for different goals)- one for the bills, one for savings and one for the spending money that I allotted to us. You don't have to get as complicated as that if you choose not to (or, you can get more complicated if you choose to), but I would recommend at least having separate accounts for everyday and for the savings so the savings you're building don't accidentally get spent on regular things. And, if you can keep your savings so that it's harder to access, even better.
8. Automate Savings. Yes, this is a "Big Win", and I was giving ideas on smaller victories you can do, but this is probably the easiest way to save. Use Direct Deposit and set aside part of your pay directly into savings account. The amount is up to you and your situation, but even $10/paycheck ($5/week) adds up. And If you don't have to worry about transferring money each time you're paid because it is direct deposited, you're that much more likely to stick to it.
9. Find ways to spend less on things you already buy. This one is a bit more broad, but leaves a lot of possibilities. For example, with few exceptions, store brand items are just as good as their more expensive name brand counterparts. (But you should double check the per-unit pricings, because some things are grouped as if they are savings, but aren't. 3/$5 on an item for store brand is not as good as $1.50/each for a name brand.) It also helps to buy from the bulk section of grocery stores so you can get just the amount you need. (Bonus: Better for the environment since there's less useless packaging.) There's also the dollar store for many, many things. I've never been one for coupons, really, unless I have one for something I am already buying, but many people use them to great effect. Since this option breeds creativity, I bet you can find other ways to shave off expenses and save.
10. Define why you are saving. This, perhaps, should have been tip number one, but these things happen when you are working from random parts of your brain. But the point stands: Defining why you are saving or what you are saving for is an important step. I have mentioned this before, and many (if not all) finance experts agree. Defining your goals in clear terms will help you reach them because it gives you something to reach for-like a house down payment-rather than just saying you need to save. It also can help prioritize and stick to the plan when other things come up or give you motivation, so it's a good mental boost.
11. I am not one to tell you to cut back on your mochas or coffee if that is something that you value, but are there things you can cut out that you don't value or that may be costing you? As an example smaller coffee, or getting one less a week saves not only a few dollars here and there, it also saves hundreds of calories a week. (Another win-win for the fitness and finance marriage.) Or Cable subscriptions you don't even use? (Watch one channel, anyone?) Look at your own spending and ask yourself: Are you spending within your VALUES? If not, can it be axed? This is a very personal choice in one's habits, but if you can find things you've been mindlessly consuming and get rid of them, it opens a lot of possibilities on where to find that extra money you are working to save.
12. Did you just get a new cost of living raise? 50 cents an hour is $20/week before tax. Maintain your current spending levels (with direct deposit, of course so you don't even know it's there anyway), and you'll start to see your savings grow a little bit faster with each paycheck.
13. Does your grocery store have a gas rewards program? If you're shopping there anyway, you may as well take advantage of the savings on gas that you can get. For many stores, you can save up to $1.00/gallon off, just for having the free grocery store key which definitely adds up. Just remember the golden rule: Transfer the amount of savings to your savings account(s) when you get home. (See item 5.)
14. Walk/Bike more often. Of course, as another way to save at the pump, you could always use your car less. And again, this is a win-win for the fitness and finance super-duo. (Yes, I just made it sound like it's a super hero. Deal with it.) Walking and biking keeps you fit, and the less you drive, the less you pay in gas, maintenance, and (in many cases) insurance.
There you have it! 14 ideas on how to START saving. Pick even one of them, and you should see your savings grow and, hopefully, have developed a habit of saving. This is nowhere near a fully comprehensive list, but some ideas to get started, so let your imagination run wild and watch the nest egg grow! Good Luck!
I was thinking about the processes of saving money and how people struggle with doing so, so I wanted to share some tips/ideas on how to get started. Granted, now that I have an understanding of more financial things than I did, I still believe that "Big Wins" (investing well, automating, etc.) are a great way to do things. But on the same level, I understand that sometimes, working on something like that can feel like a stretch at best and impossible at worst, if you can't even get some basic money in the bank-believe me, I get it.
So if you need a few Small Victories to help you feel like it is possible to get started, here are some things I find to be helpful to get STARTED in your savings goals, in no particular order. A lot of these I have used personally, and some of them I have seen around that I think could work for people.
Use as many or as few as your tolerance allows (allowing you to still enjoy life, and not spend every waking moment obsessing about the next thing to cut), and soon you'll find that you're starting to build a nice nest egg. I'd even wager that you'll start to see your own creative brand of saving money emerge and come up with other ideas, all your own. Good Luck!
1. Starting very basic: Save $1/day. At the end of a year, you'll have saved $365. (Or, more accurately, $365 and some random change if you have the savings in an interest-bearing account.) I truly believe that ANYONE can save one dollar a day. Mastering the idea of saving small amounts when you don't have money or are just getting started is extremely important too-because if you are not in the habit of saving and managing finances with nothing, having money won't change that, and can lead to some very bad money habits that are harder to correct when you DO have money. $1/day is a great way to start a good habit in a sustainable way.
2. Conversely, there is the Savings Money Jar idea that people have been using. In this, you save progressive amounts each week, starting with $1 the first week, then $2 the second week, etc., to the point where you save $52 in the last week, so at the end of the 52 weeks, you'll have saved $1378. That's a nice chunk of change to add to the nest egg, and of course, if you're able, you could always ramp it up to save more each week, as well. One thing though: While most/all of the links that talk about this use a Jar, PLEASE put the money in a savings account and not on your counter/in a jar where it's too easy to be tempted to spend it...
3. Round Your Funds. One Thing I have always is to round up and down on funds, down on deposits and up on expenses. For example, if a purchase is $3.50, I will say it's $5 in my tracking. Conversely, if I make a deposit of $100, I will note it as $95. If you use this method, it will create a cushion for your account, in amounts that may be a pleasant surprise for you. After a certain period of time (once a month, once every week, whatever works for you), transfer the cushion amount to savings.
4. Brown bag your lunch. This seems like an obvious choice, but one that many people don't take advantage of. Of course, bringing your own lunch is definitely less expensive than buying it every day. This also has the advantage, from a fitness standpoint, that you can control what is in your meal and the portions. Win, win if you ask me.
5. Do you shop at a grocery store that puts the "You saved XX Today" on the receipt? Transfer that amount to savings when you get home. True, it may only be a few dollars, but every little bit adds up. This also works well with the rounding technique I use above for things. If your budget for groceries is $50/week and you only spend $46, that $4 could be transferred to savings to help add up.
6. When I finally automated finances (in a better way since it had always been auto pay, etc.), I set up Separate bill/spending accounts and 7. Separate savings/spending accounts. So Three Accounts total (in reality, more than that because, as I've mentioned before, I have at least 3 saving accounts for different goals)- one for the bills, one for savings and one for the spending money that I allotted to us. You don't have to get as complicated as that if you choose not to (or, you can get more complicated if you choose to), but I would recommend at least having separate accounts for everyday and for the savings so the savings you're building don't accidentally get spent on regular things. And, if you can keep your savings so that it's harder to access, even better.
8. Automate Savings. Yes, this is a "Big Win", and I was giving ideas on smaller victories you can do, but this is probably the easiest way to save. Use Direct Deposit and set aside part of your pay directly into savings account. The amount is up to you and your situation, but even $10/paycheck ($5/week) adds up. And If you don't have to worry about transferring money each time you're paid because it is direct deposited, you're that much more likely to stick to it.
9. Find ways to spend less on things you already buy. This one is a bit more broad, but leaves a lot of possibilities. For example, with few exceptions, store brand items are just as good as their more expensive name brand counterparts. (But you should double check the per-unit pricings, because some things are grouped as if they are savings, but aren't. 3/$5 on an item for store brand is not as good as $1.50/each for a name brand.) It also helps to buy from the bulk section of grocery stores so you can get just the amount you need. (Bonus: Better for the environment since there's less useless packaging.) There's also the dollar store for many, many things. I've never been one for coupons, really, unless I have one for something I am already buying, but many people use them to great effect. Since this option breeds creativity, I bet you can find other ways to shave off expenses and save.
10. Define why you are saving. This, perhaps, should have been tip number one, but these things happen when you are working from random parts of your brain. But the point stands: Defining why you are saving or what you are saving for is an important step. I have mentioned this before, and many (if not all) finance experts agree. Defining your goals in clear terms will help you reach them because it gives you something to reach for-like a house down payment-rather than just saying you need to save. It also can help prioritize and stick to the plan when other things come up or give you motivation, so it's a good mental boost.
11. I am not one to tell you to cut back on your mochas or coffee if that is something that you value, but are there things you can cut out that you don't value or that may be costing you? As an example smaller coffee, or getting one less a week saves not only a few dollars here and there, it also saves hundreds of calories a week. (Another win-win for the fitness and finance marriage.) Or Cable subscriptions you don't even use? (Watch one channel, anyone?) Look at your own spending and ask yourself: Are you spending within your VALUES? If not, can it be axed? This is a very personal choice in one's habits, but if you can find things you've been mindlessly consuming and get rid of them, it opens a lot of possibilities on where to find that extra money you are working to save.
12. Did you just get a new cost of living raise? 50 cents an hour is $20/week before tax. Maintain your current spending levels (with direct deposit, of course so you don't even know it's there anyway), and you'll start to see your savings grow a little bit faster with each paycheck.
13. Does your grocery store have a gas rewards program? If you're shopping there anyway, you may as well take advantage of the savings on gas that you can get. For many stores, you can save up to $1.00/gallon off, just for having the free grocery store key which definitely adds up. Just remember the golden rule: Transfer the amount of savings to your savings account(s) when you get home. (See item 5.)
14. Walk/Bike more often. Of course, as another way to save at the pump, you could always use your car less. And again, this is a win-win for the fitness and finance super-duo. (Yes, I just made it sound like it's a super hero. Deal with it.) Walking and biking keeps you fit, and the less you drive, the less you pay in gas, maintenance, and (in many cases) insurance.
There you have it! 14 ideas on how to START saving. Pick even one of them, and you should see your savings grow and, hopefully, have developed a habit of saving. This is nowhere near a fully comprehensive list, but some ideas to get started, so let your imagination run wild and watch the nest egg grow! Good Luck!
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