How does a simple thing like saving money become a priority in our lives? Is saving money something you learn from your parents, schools, old age, or an epiphany that dawns on you when something goes horribly wrong and you don’t have a penny to your name? With the economy still in the toilet and barely enough jobs to accommodate the cost-of-living, it is becoming more evident that people aren’t saving. Concocting some formula or method for saving money is easier said than done, but when you’re fresh out of college and the industry you just went to school for is tanked, or when you have been job-hoping for two years to make ends meet – following a formula or method doesn’t seem like an option. In April 2010, a CNN article reported that one in four Americans have no savings at all. I can honestly admit that I used to be one of those Americans. Every paycheck was prioritized and spent before it even came. My bills were organized in order of severity and everything was always (almost) paid on time. Now, when my car broke, or there was an unforeseen emergency, I would spend the next six months making up for it (and paying for it) financially because I never had any money in my savings account. I would listen to financial advisors and read books that made it sound so easy to put away $3,000 a month. I had every excuse to not save money. I had just finished college, my well-paying job had to pay for my apartment, nice car, clothes, and I was completely independent. How was I supposed to save money? Truth is, there is no way I could have ever put away $3,000 fresh out of college even if I would have known how to spend my money correctly. But if I would have saved something, I would be in much better shape now.
A few years back I became tired of the unforeseen emergencies causing havoc on my financial life. I started to move savings to the top of the severity/priority list of responsibilities and started to see little digits eventually become bigger digits. I began only setting aside $25 a paycheck, then $50, and soon moved onto a percentage that I was comfortable with. This didn’t happen overnight and it took a lot of sacrifice and discipline to ignore the money in my savings account every time I wanted to do or buy something. The number one rule for saving money on any income, in any financial situation is to be disciplined. If savings becomes a must in your financial life, just as breathing, exercising to stay fit, or eating right to stay healthy – your financial situation and your life will change immensely.
If you are considering saving, but are not sure how or where to start or think you don’t have enough money, I urge you to check out Dave Ramsey’s The Seven Baby Steps. It’s for anyone looking for a way to save, regardless of their financial situation or income. Seven simple baby steps can put you on track to not only saving money, but doing it the right way and for the right reasons. Dave has made me an avid saver; however, I still reference back to those baby steps every time I need a reminder to keep my savings on track.
The important thing to remember is that saving $1,000 doesn’t mean saving it all in one shot and staying hungry for a month; it means being disciplined and saving a little at a time to reach your goal. Follow the steps and tell me how it goes. I promise you won’t be sorry and you’ll soon start to call yourself a saver!
A penny saved is a penny earned. ~ Benjamin Franklin
Vanessa Maynard is an informed and experienced finance writer with subject matter expertise in a variety of industries within the financial sector. By trade, Vanessa is Consultant for a firm that provides residential and commercial loan review and due diligence, staffing solutions, consulting, and analytics. Her firm has built a reputation as trusted advisors in the mortgage industry throughout the United States, Europe, Mexico, Canada, and Puerto Rico.