Things Add Up
I stumbled upon a great Cashville Skyline blog post recently that pondered the question “why is it that as a society, we are so enamored of the idea of frugality, yet we are not actually saving? ” I started thinking about it, and I realized, it doesn’t stop there.
We are obsessed with cooking shows, but we don’t cook. We mainline information about health and fitness, but we don’t exercise and we’re getting fatter. We devour articles and blogs about mindfulness and meditation, yet most of us do not meditate daily. I know there are people out there who stockpile books on minimalism and de-cluttering and then struggle to throw away even one piece of artwork their child has produced.
The fact is, from the moment you decide that it would be a good idea for you to do something that is hard, to the moment of actually doing it – something needs to fundamentally change in your brain to alter your entire thought process. This is *Not Easy*. In fact, it is painfully hard, especially for a generation that is pretty conditioned to looking for the short-cut, the path of least resistance, and a way to make the smallest possible amount of effort that requires the least amount of focus.
I’m guilty of all these things to varying degrees at different times. But for the first time in my life, I have begun making real progress with saving. Not including my 401K, which I just rolled into an IRA (to delightful results) and college savings for my children, I went from saving an embarrassing 1% or less of my take home salary to 15% or higher in about five months. This still needs to improve a lot, but it is exciting to behold the climb.
Not how much money I have, that’s for sure. It was my brain. After getting all riled up reading a bunch of sassy money blogs, which coincided with finishing off the last of our debt, I decided that I had to save a lot more money. Once I really delved into the (shocking) numbers and committed to the idea in my brain, I worked to put as many things into place as I could to set myself up for success.
My husband and I both signed up for YNAB, which has dramatically helped us get our heads around where our money is going. Revelations were had, such as the staggering combined $1500 per month we were spending on groceries and household necessities between the two of us. The wasted money on gym memberships. The obscene amount we were spending on gifts. Hundreds, possibly thousands of dollars wasted because I was inexplicably signed up for New Jersey EZ Pass instead of New York EZPass — for YEARS! — and not getting the proper discounts available to NYC residents. I think have single-handedly funded all upkeep of the Verrazano-Narrows Bridge. (This is called “what happens when you do not look at your statements.”)
Once my brain had the opportunity to really absorb and visualize the numbers, it spurred me to change the way I think, which had to happen before I could change the way I act. It can be so hard to see the fundamental essence of how money grows (or diminishes) but when you do, it’s stunning.
A great example – one of the rewards websites we use goes into our children’s college savings account. I try to remember to shop through it when I shop online. The rebates are 2% here, 5% there – small amounts. But the lifetime tally is always visible on my account: it’s over $1000 after 8 years. Those piddling amounts added up to a thousand bucks that I wouldn’t have otherwise had in my child’s college accounts. Not including compounding.
I also signed up for a good rewards credit card that I pay off every pay period. Again, 1% here, 4% there – blueberry sized bundles of money. But I can see the totality on my account and I am saving all my rewards for Christmas shopping. With the sign-up bonus, I should have a $500 bounce just in time for the financial Armageddon that is Thanksgiving/Christmas/My Children’s Ill-timed Birthdays. Of course, everything in your bank account works this way – the long-term implications are just hidden from daily view. Until they hit you over the head with a frying pan. But if you look at everything like this, all the time, you’ve taken the first step to changing the way you think.
Setting Yourself Up for Success
Once you are enlightened about your own situation, you will have some inspiration and fortitude to do a few tough one-time things (i.e. cancel gym membership, or for some, canceling cable). Next, you realize that you need to arrange things so that you are not set up to fail. Get a budget framework or app that works for you, automate your savings, set up some reasonable goals, communicate with your spouse about what in God’s name you are both spending $1500 a month on at the deli.
But the most important thing is to keep that clear vision with you at all times so that you are motivated to stick with the change in your daily behavior. This is where it usually will all go to hell in a Pottery Barn basket. A small purchase here, a little something for the kids there. It’s a work in progress. I still find myself wandering into Banana Republic during lunch in a daze, only to find myself with yet another pair chinos in my hands before I run out in a cold sweat. These things might seem small, but whether you’re talking about saving or spending, it adds up – you know it does.
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