“I’d like to live as a poor man with lots of money.” ~Pablo Picasso
“A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” ~ Suze Orman
“To be successful, you have to have your heart in your business, and your business in your heart.” – Thomas Watson, Sr.
As I continue the road to financial wellness (meaning the health of my savings and bank accounts). I recently looked at my spending habits: how to assess, manage and monitor my charges to get them under control. Today I thought I’d share how to create a savings plan.
Each one of us will have some differences in our savings but ultimately the crucial step is to achieve our financial goals.
THINK – Close your eyes and picture yourself two years from now. This is a bit harder than you think (especially in this economy). Now image that you can see yourself and visualize one image that reflects strong financial management-buying a property, leasing a car, etc.
SCRIPT – Write down your goal. Anywhere. Your diary. A post-it. Your daily to-do list. Putting your objectives into words forces you to think more clearly. It also helps to make them more tangible and realistic. Mine (and I am putting it here) is to pay off my car and own the title, along with repairing the damage to my car that someone so nicely did one night without leaving a note.
SHARE – Tell it to someone else. Email your best friend. Text your hubby. Or tell me! You can post it below or email me at thriftygreengal at gmail dot com!
Now that you have set your vision, put it into motion.
Setting up an automatic savings plan which deducts directly from your monthly pay check is a solid approach. I set mine up with my employer to take $25 and directly deposit it into my savings account. But I also have my bank to put money from my checking account into my savings account every time I pay a bill.
Be aware: savings accounts at banks are low at the moment, so you will have to shop around. My bank offers a higher interest rate if you use your card 5 times a month. But you should check out your local credit union as they typically have a higher interest rate.
Don’t think you can accomplish this in two years? Let compromise and revisit your timeline or redefining your aspects of your vision. For example, if you plan on purchasing a piece of property buy a fixer-upper instead of a brand new home.
As you know, one of my goals is to get into better shape, and not just physically but financially too.
Financial wellness can mean different things to each of us, but we all appreciate a sense of control. Do you know how much you are spending each month? On food? On clothes? On vacations?
Thanks to credit cards it is really hard to know. So this is my first task – to gain a sense of financial control.
- Get Organized – Thankfully to technology these days you don’t have to sit with your calculator and be friendly with it. Sites like Learnvest and Mint can help you better understand your spending habits by categorizing your purchases, complete with pretty little graphs. I prefer Learnvest over Mint but you can try both and see which one fits you better.
- Create a Budget to Track Your Finances – Use the information from Learnvest or Mint to create a budget. You now got a better sense of your spending habits, this should be the basis of your financial plan. Set limits that reflect your previous behavior (this can get a bit tricky, as you need to start with reasonable expectations). For an example, if in December you spent $200 on Starbucks, try to not promise yourself to go cold turkey, but to limit your intake on Starbucks to a few times a week and make coffee at home (which is easy these days since the creation of the Keurig to make single cups quickly).
- Make a Savings Plan – There should be some room between your income and your expenses. Make a savings plan starting with the questions of: How much do you need to save? If you are in your early 20’s you need to save at least $30/week towards your IRA or 401k and if you are older and just starting your IRA or 401k you will need to be more aggressive at putting money away for retirement. When it comes to vacation how much is to much? And so on…
As I continue to work on my financial goals I will give your more insight to each of these.
At 24, I feel that I have reached that age where I can hear my biological clock ticking a little more loudly as I keep trying to climb the corporate ladder.
As much as I want to accomplish several life milestones in my twenties, I have had a hard time (as you recently read that my hubby is now being relocated back to Illinois), which includes a diagnosis of polycystic ovarian syndrome (or PCOS for short), losing a job, a hubby who wants to wait just a bit longer on having kids and trying to start a family.
Figuring out how to balance my career with my much-desired growing family is something that I think about way more than I’d like to admit, especially with my baby sister just giving birth to her second child a few months ago. Or the fear that I may not be able to have children due to my PCOS. But I digress.
With a recent job change behind me, I am feeling pretty good about my job prospects at this company. Even though I only have my associates’ degree verses most of the office employees who have a bachelor’s degree I have many skills that put me ahead of the game. As progressive as I feel I am in my new job there isn’t much of an opportunity for a promotion, just more tasks on my plate. Which in a way can be both good and bad depending on how the company handles the staffing.
There is a part of me that thinks it is incredibly unfair that my hubby doesn’t have the same kind of worries that I do or the fact that women only make 77 cents to the dollar of what men make. He doesn’t fear if his company will retaliate for taking the full parental leave, and his career won’t be interrupted by long absences, doctor’s appointments, and breast-pumping.
There is hope though in the months to come to be able to change things.
Just a month since I have published my goals for the year. And some things have happened recently in my life that will help in the long-run but in the meantime I still have to maintain my spending roughly the same.
My hubby got re-located back here (and yes we have been living separately while he has been located in IA for work) and we are looking for a place for us to live together now that he is back here in Illinois. (We could have stayed together if the drive wasn’t the death of our finances.) Both of our leases are up in the next month or so. We have already talked about budget since we have been on our own separate budgets for the past 18 months to keep savings to a maximum. I will contribute a bit to the payments of our new place but will be mainly paying for the utilities (since he makes just a bit more than I do that it just seemed fair). This will help us both financially since we were both paying our own rent, our own electric, etc. I’ll pay for the cable and internet bill too.
Since I still have payments on my car I will be able to pay off my car quicker as I can throw a few more dollars towards my car payments. I’ve also just made it halfway through my payments.
I had opened an IRA with my bank (they don’t have a minimum as long as you have an account with them) and have contributed $125 towards the account. Not much but it is better than nothing and I’ve made a pretty penny in interest. Once I get more in there the interest will start to look better.
For my life goals I am trying for every other week sometimes it happens to be every week which is ok as long as I make it clear that I can’t stay long. I typically stop by because I picked up some clothes for my niece and nephew for them to wear or I had something delivered to their house instead of my apartment (especially since things seem to either go missing or I can’t get to my package because the office has closed for the day).
While my hubby is in transition in his new job he is staying with me and we have been using coupons for as much as we can. Or we at least look for the best deal when we go shopping together (or at least spend 15 mins discussing in the store which offer is the better one. Not really saving time there but at least saving a few bucks).
When we eat out, we eat out fairly cheap. Meaning $7 or less cheap. Which is okay sometimes but we tend to eat at home or will splurge for a more expensive option for lunch/dinner, like Chipotle.
All over all I feel that we are doing fairly well.
Here is a recap of my goals:
2013 Life Goals
See my parents every other week. – For some time I took off from seeing my parents to live my life without them scrutinizing every little thing I do/did. We are slowly working through our rough relationship but we are trying none-the-less.
2013 Financial Goals
Reach a net worth of $10,000 – I am slowly saving between my IRA, my 401k, savings account, secondary checking account (which earns interest), and mutual funds. But I also need to pay off some debt and also pay off my car which technically falls under my debt.
Reduce monthly spending down to the necessities + $100 free for all budget – this is going to be hard since I have to use my credit card at least once a month so I don’t get charged by them.
Use more coupons and membership cards – I can’t tell you how hard it is to use coupons… one I like saving paper and two I don’t get coupons for the things I buy on a regular basis 😦 But I am going to try harder to use coupons. Why membership cards? Well some of them actually give you money back to spend on future purchases and others give you discounts that people who do not have a card can not have (or they give you both). I’ll write a post in the near future about the benefits of membership cards and the pros and cons of each one. 😉
2013 Career Goals
Update my resume – should update every 6 months anyways so this should be something that I do twice a year…
Continue my education – to be able to go places in life you need to be on top of the newest trends and the newest software(s)