JASMINE MAKI: Setting goals to become a saver
My entire life I’ve been a spender, not a saver. As a preteen, my allowance and babysitting money was spent on lip gloss and nail polish. In high school, my limited funds went towards various forms of entertainment. In college, I started a style blog and spent all my extra cash on new clothes, shoes and accessories.
Realizing I had a problem, I established some spending limits, allowing myself just one fashion purchase a month. But, when I wasn’t spending money on clothes, I was spending money elsewhere.
The purchases constantly changed, but the hole in my pocket remained.
I opened additional bank accounts to try to restrict myself from spending. I set up an automatic weekly transfer from my checking to my savings. But, then I’d plan a trip and I wouldn’t just dip into the savings, I’d dive head first. Soon, those funds were completely demolished.
When I graduated college, my sister gave me Dave Ramsey’s “The Total Money Makeover.” I remember thinking, “Maybe, this is it. Maybe, I’ll finally learn to save.”
But, with the added bills of living alone and paying back loans, it was nearly impossible to save. So, when I received my tax refund, I quickly stowed it away.
I transferred my funds to a secondary account at another bank. I figure if it’s out of sight, it’s out of mind, right? But, that wasn’t enough. I also sought out some professional help from financial counselor Richard Bechhold at The Village Family Service Center.
Bechhold said everyone’s financial situation is different and requires its own evaluation, but he shared some general tips for saving money and avoiding spending one’s savings.
The first step is to create a budget so you know where you’re spending money. Then, set goals for savings. He said the general consensus is that you should have one to three months worth of your income in savings, so you have a financial cushion if you lose a job or come into health problems.
Those savings goals also include vacations and special expenses like new technology or Christmas presents.
Bechhold said it’s hard to set that money aside, but he suggested several solutions. He said you can talk to your employer’s human resources office about splitting your paycheck so a portion goes directly into a savings account. If your employer doesn’t offer that option, you can talk to your banker about setting up an automatic transfer to a savings account every time you receive a paycheck.
But, the most useful piece of advice I took from Bechhold was to visualize the joy I’ll get from reaching my goals. He said if your goal is to buy a house, envision yourself enjoying the new home with your family.
I’m not planning to buy a house, but envisioning myself backpacking through Europe is helping me say no to more shoes and accessories.