Warning: This is severely motivational. If you are serious about saving money and want the energy to START RIGHT NOW then continue reading.
So you’ve started your budget and now you are ready to start saving.
This makes me excited, I love saving money! I love it when other people save money! You know why? Because we’ve all got 99 problems but soon money ain’t gonna’ be one. I’m just kidding, I don’t know that rap. But seriously, once you start saving it’s like the rest of your life starts falling in to place. Suddenly you aren’t staying up all night worrying that you won’t be able to buy enough groceries to last the rest of the week. You don’t worry about things like debt or feel heartbroken because you can’t help your child out when they need a little extra cash at college.
No, money can’t buy you happiness but it can relieve a little bit of your everyday stresses. Just think how it would be to have NO payments. Seriously, close your eyes for a second and just think about it …. No mortgage, no car payment, no credit card payments, NO DEBT!
Have I gotten you excited yet? I know I’m excited!!
When my husband and I got married my dad gave us Total Money Makeover (the book by Dave Ramsey) for our wedding gift. I was like, wow. A book. That’s great. Thanks dad. After reading it I couldn’t be more thankful that he did give us that book. It has completely changed our lives. Right now my husband and I are debt free and putting money in savings for a house. We have an emergency fund and are starting on our retirement fund. Let me tell you a little secret … My husband and I are in our twenties, early twenties. Honestly, if we can do this you can do it! But don’t you worry, you don’t have to do it by yourself, I am here to help!
Emergency Fund
If you haven’t read the Total Money Makeover (affiliate) yet I would highly advise it, it is very informational and Dave Ramsey is one smart man! If you don’t want to read it then that’s okay because I’m here to tell you what my husband and I do to stay out of debt and save money.
In the book Dave Ramsey starts out by talking about an emergency fund. This is one of the smartest things to do. I don’t know if you were effected by the recent oil prices dropping, if you were then you know how easy it is to lose a job. Luckily my husband and I were okay but we did have family members who had lost their jobs and had nowhere to turn. Let’s be clear, this doesn’t just happen if you’re part of the oil industry. Losing your job can happen to anyone. What would happen to you and your family if there was no income coming in for the next couple of months? Most of us would be in big trouble!
This is where the emergency fund comes in. Dave advises that it is best to have enough saved up in JUST an emergency fund that can cover three months of ALL of your expenses, i.e mortgage, car, groceries, just the main necessities. In the case of job loss it provides you a safe cushion to get back on your feet for two to three months.
My Experience
A little side story, when we finally got enough in our emergency fund we actually had an emergency where we found out that a couple of the wheels on our car were dented and it was giving the car problems, just a week before that we had put new tires on since they were starting to wear down. There was NO WAY we would have enough to pay for new wheels as well that month, but luckily we were able to use our emergency fund.
Your Goal
After you’ve set up your security blanket (emergency fund) you want to have a goal in mind of WHAT you are saving for. With my husband and I still being young our main goal was that we want to save up for a house. I mentioned this in my post about starting a budget, we want to save up $30,000 for a down payment. (Side note: we are also putting a little bit of money in a retirement fund).
Figure out your own goal, what do you want to save for? Do you need a new car, do you want to be completely DEBT FREE, is your child going to college soon, do you just want to start saving for retirement? Think about your goal and the important thing is WRITE IT DOWN. Write down how much you want saved in six months, one year, five years, even ten years!
Adding it in Your Budget
Since you have your goals written down (no really, grab a piece of paper right now and write down what you want your savings goal to be at this very minute) you can then adjust it to your budget. Look at your budget and figure out what you can save on. Are you spending a little too much in entertainment? Are you spending a little too much eating out?
Just remember, a budget is a lot like a diet. If you quit chocolate, cold turkey, to lose weight then you’re going to relapse in four days and eat a whole bag of chocolate chips. Same with the budget. If you are used to buying five new outfits every month and don’t buy any the next then you’re going to relapse and end up buying out Victoria’s Secret. Slowly adjust your budget and find ways to cut down on your expenses such as:
- Adjusting your insurance rates
- Not eating out
- Using coupons for your groceries
- Stop buying stuff you don’t need
- Add more income
With any extra money from these expenses you’re cutting down you’ll be putting this in your savings. Do not get discouraged if you’re only saving $50 a month. That’s okay! Over time it gets easier, it will keep growing and soon you’ll be driving that new car that you wanted. Keep at it and don’t get discouraged.
And just start it. You can read all day about how to budget and save but you aren’t going to get anywhere if you don’t start.
What do YOU want to save for?
[…] If you need some extra advice on HOW to save money check out my post → How to Start on a Successful Savings Plan […]