Saving Money

I love saving money. The feeling of having an emergency fund is comforting and builds my confidence. As I watch my savings account grow over time, I get a beautiful sense of satisfaction. The only thing I love more than saving money is SPENDING money. Unfortunately, I am a reformed SPENDER who forces myself to save because it will help me achieve my goals and lead to a feeling of peace.

I am using the common technique “pay yourself first.” I’m not sure who came up with this idea first or coined the phrase. The day I get paid, I automatically transfer a small amount into my bank savings account and a small amount into an investment account. Before my paycheck even hits, my company removes my 401k contribution. The automation of this helps because I am saving money and progressing towards my goal without even thinking about it. I never even really get that money so I don’t feel like I’m giving up anything. If I wait until the end of the pay cycle to see if I have extra money, I never will. I’ll find something I need or want or I’ll find a reason to celebrate with friends at a restaurant. Also, before I receive a bonus or commission at work, I plan where it will go long before it arrives. I put some in savings and some towards debt and spend a small amount for something I’ve been wanting or needing. I review this plan several times before receiving the money. This takes away the temptation to go bananas once I receive a large sum of money and succumb to emotional spending.

Each year I set savings goals and use the concept of sinking funds. A sinking fund is like an emergency fund, but for planned/budgeted expenses. Here are some examples: This year I want to save $1000 in an emergency fund, $3000 for a vacation, $500 for likely car repairs, and $300 for my cat Jackie’s vet bills, etc. In a “sinking fund” I stow away small amounts over time that build up to these totals. This way, when I need the money, it is there, and I don’t have to take on debt to afford the expense. I keep all my sinking fund money in my savings account, and track progress on my own on a white board in my office. I try to think of everything that will come up in the year and prepare as much as possible. Of course, there is always something I didn’t think of, and that is why that $1000 emergency fund is there. That $1000 has saved me many times, like when I needed all new tires for my car or went to the emergency room and the charge after insurance was $1900! Eek!

I hope these concepts help you think about your goals for your money and how to get started.

I used AI to create this image.