There are two types of people in the world. Habitual savers and the rest of us. The habitual savers were either born that way or had role models that showed them the way. Good news. The rest of us can figure out a way to save. After a while, it’ll feel so good that we start to do it without thinking about it. The hard part is getting started.
During this blog entry, I’m talking about all types of savings. This can be for short or long-term goals, for emergency expenses, for a large purchase or for retirement. I’m purposely not going to focus on the investing aspect of it because we have to get the savings started first.
As you start saving, you need to be having a dialogue, internal or otherwise – whatever works for you. You need to come to understand, or accept the fact that spending every last dime you make and more does nothing for your well being and peace of mind. Instead of the thought process that goes: “I deserve to buy this (fill in the blank), because (another blank to fill in).” Know that having money in the bank is not only going to give you peace of mind, it’s going to open doors for you by giving you options. However, you don’t need to have years of therapy to work through all of this (I hope!), you need to allow yourself to save with these thoughts providing encouragement. As you begin having success in the savings department, you will like the feeling and will want to keep going.
How should you get started? Regardless of the goal, the exact method will be a variation on the theme: Out of sight out of mind. Try to never let it in your sight (or checking account) from the very beginning. If you have a non-retirement goal use direct deposit to funnel a portion of your pay to a separate account. You can take the leap and save the ideal percentage from the beginning, or you can ease into it by starting with a lower percentage of savings and raising it later. Consider using an online bank so you will really have to think about it before withdrawing the money. You generally get a better interest rate online, just make sure you see the “Member FDIC” logo so you know your money is safe. Another trick is to not carry a debit card with you if one is provided. That can be a little too tempting at first.
For retirement savings, have it taken directly from your check if it’s in a company sponsored plan. For other retirement savings plans, use direct deposit where available or schedule an automatic transfer from your checking account on (or very close to) payday.
The hardest part of the whole process (and it isn’t hard) is to get the form(s), fill it out and turn it in. Then relax and let the savings begin. . . . .
