What’s up party people! It’s Monday – get excited!!!
What’s that? Mondays are lame?
Okay, let’s try it again – It’s Monday, y’all!! Check out this awesome new savings idea I just heard, along with a raw and transparent history of someone’s real financial life who just laid it all out in an email for us to gawk at today! Get excited!!
Any better? :)
If so, continue reading… (if not, click here)
Hey J. Money,
I hope you’re doing well! I have been a reader since at least 2010 (WHOA where does time go?). I started out adulthood with a pretty rotten relationship with money. I came from a lower middle class family and never really learned at all how to handle money.
At 17, I was the first person in my family to go to college, and was highly encouraged by friends, family, and even my school’s financial aid office to finance my education with loans. Fast forward a few years, and I had $70,000+ in student loans and a bunch of credit card debt, which I ended up paying off through a probably shady consolidation agreement.
That was a few years ago, and I am still learning how to realistically manage my money. I am definitely guilty of lifestyle inflation. After being underpaid for years and really struggling to make ends meet, I’ve had about a 40% pay increase in the past few years, and almost no additional savings to show from it despite simultaneously reducing my cost of living. Throughout these years, I have been an on and off reader of Budgets are Sexy. It’s hard to read about personal finance, when you just want to buy cute things and pretend the future will take care of itself, ya know?
Anyway… I’ve gained a lot of tips from you and from some other blogs and would be in an even worse financial state if it weren’t for you guys. Lately, I’ve really been wanting to save more. I don’t have a healthy emergency fund and since I’m making a steady amount, very temporary belt-tightening can fund things I should be saving for (vacations, minor car repairs, etc). It’s hard to see the incentive to save when I am meeting my immediate needs and wants. (Btw, I know on many levels why saving is extremely important, it’s just hard to do.)
I have found a weird practice that has been helping me put A LOT into savings the past few months. I’m a big online shopper. I often go online, fill my cart, and then decide whether or not I can afford the cost of it. Sometimes I decide no and don’t make the purchase, and other times I decide yes.
What I have been doing differently is that, if I decide I can afford it, and I don’t really need the items, I immediately transfer that amount into my savings account instead of spending it.
Light bulb moment: if I can afford to spend it, I can afford to save it! WHOOOOA.
This has revolutionized my savings life. Before this, I would sometimes decide not to make unnecessary purchases, but the savings was intangible or never happened because I’d just end up spending that money on something else. By immediately transferring over the $70 I didn’t spend on throw pillows or $15 on takeout for lunch, I can see the immediate increase in my savings account.
It’s amazing! I feel like I finally “get” what I’ve been hearing and reading all these years from people who are natural savers. I am probably not the first person to think of this, but I am pretty proud of thinking of it for myself, haha.
Sorry for the long email, but I just wanted to share my small success with you, since your blog has had such a big impact on me. Thanks for doing what you do!
Such a beautiful note, isn’t it? And not just cuz they said pretty things about me ;) Did you catch all the takeaways? (Don’t worry, I took notes)
- More money does not automatically mean more savings!! It doesn’t matter how much you make, it matters how much you’re spending. A $200,000 earner can be just as poor as a $20,000 one.
- Lifestyle inflation is the devil. The reason those $200k people are poor? They keep increasing their lifestyle as their income grows! You can’t build wealth that way. And who wants to keep *needing* to earn more to keep living?? (Now on the plus side, it should be much easier for a $200k earner to cut back than a $20k earner so the potential there is “yuge.”)
- Saving doesn’t count unless it’s actually saved. If you buy a Ferrari for $300,000 on sale from $400,000, you aren’t actually saving $100,000. All you did was spend $300,000.)
- It’s important to KNOW YOURSELF. See all those things Becky was self aware of in that note? Admitting to caving into lifestyle inflation? Knowing she needs to be better about saving? Or my favorite, saying it’s hard to read about finance when, “you just want to buy cute things and pretend the future will take care of itself,” haha… You have to be self aware enough in order to make good change. There’s no sense in lying to yourself about anything :)
- You have to keep experimenting until you find what works! This is why so many financial blogs exist – not because the information is any different (PS: it’s not), but because there are 1,001 ways to get something done (and even more sometimes for it to *sink in*). We all figure it out at different stages in life, but we have to keep on trying new things until it finally clicks.
- You don’t have to be natural savers or investors to become good at it. It might be more frustrating or take longer if you suck (for example, I COULD get better at singing in the shower, but it’s going to take me a lot longer to not make you cringe than my wife who sings much nicer naturally :)), but at the end of the day any of this stuff is do-able provided you want it bad enough.
- Which leads us to my most favorite saying with money – YOU HAVE TO WANT IT BAD ENOUGH to get it! Everyone wants a million dollars or to quit smoking or to shed 20 pounds and retire early in our youth. It’s not like you don’t know *how* to do that, it’s just some people want it more than others and make sure to place it high on the priority list. Probably after failing a few (hundred) times too. None of this is about learning how to be good with money, it’s about getting our selves *to take action* over and over and over again. And the only way to get yourself to do that is to really REALLY want it enough!
Man I love emails like this so much… The rawness gets me every time, especially when people aren’t afraid to admit their failures so openly like that!
Becky may not have had an easy start with things, but she’s learning and adapting and you know she’s going to go far with that awareness she has with things. Hell – she was the first in her family to attend college! So she has the drive! Now it’s just time to redirect it all back towards that money like she’s working on, and I’m sure the next email we get will be even hotter.
After all, she’s already coining phrases :) I think I’m going to have to steal that one from you, B$. If you can afford to spend it, you can afford to save it!
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!