Saving $1,000 in 120 days might seem impossible or unrealistic to some, but with hard work and discipline it can be done. That’s $250 a month, or $8.33 per day for 120 days. It doesn’t appear too expensive when given a daily amount.
Previously, I challenged my group to save $500 for one month and they thought I was crazy. Now, let me preface, I knew their spending habits and asked them to trust me. We put a plan in place and began to work our plan, including weekly accountability sessions. They actually had to take pictures of their money and send it to me. Understand, a goal without a plan is merely a wish and I will be the first to say that I am not crazy. In fact, each one of us exceeded our goal of $500 for the month. Yes, it is possible!
Simply put, everything hinges on your mindset and, more importantly, peeling back the layers and determining your habits and/or triggers. Let me be very clear: if you do not unearth your root issues (whatever it is that causes you to continuously make poor decisions, financial or otherwise), no matter how tough they are, you will have a hard time moving forward with anything in life, not just saving money.
Is it okay if I am a little transparent? I can’t speak for anyone else, but I did not grow up in a household where we discussed money, finances or credit. In fact, we were in survival mode most of the time, and when you’re in survival mode you’re trying to make it through the day or week; saving money or worrying about a credit score is the farthest thing from your mind. I never knew what a credit score was until I became an adult.
I had to truly analyze why I had a tough time saving money. I often paid bills late, I never had a budget, loved to shop, ate out on a regular basis, was an impulse buyer and tried to live my life through my kids and buy them everything. How many can relate? When I peeled back the layers, so to speak, most of these poor habits stemmed from my childhood. Please understand that I am not pointing the finger of blame at anyone, but I had to acknowledge my “why?” and deal with these real issues, enabling me to move forward. I ask you to do the same and look at your bank statements. You will be amazed what is important to you, and you will see patterns and determine your current spending habits.
Too often, we use our debit or credit cards, and there is a true disconnect between a plastic card and paper money. Let me explain. When you swipe your credit or debit card, the amount you’re spending is not tangible because you can’t see or feel the amount. Typically, you will spend 30 to 40 percent more when you swipe your debit or credit card. On the other hand, when you are spending cash, money is leaving your hands and there is a transference so to speak. As an example, if you pay for an item and you have a $50 or $100 bill you almost hate to use the larger bill because you know when you “break” that larger bill, it’s as good as gone.
I want to challenge you to determine your spending habits and know what your triggers are. Do you shop when you are lonely, depressed or emotional, or believe you are deserving despite having bills that are due? Answering these simple questions can help you move forward in your financial journey. I will be the first to tell you it will be challenging, but after 120 days you will look back and feel great about what you have accomplished.
Now let’s get to work!
According to the Associated Press, two-thirds of Americans would not be able to cover a $1,000 emergency . . . that’s huge! In fact, most emergencies involve less than $500, which may not seem like a lot of money, but when you don’t have it saved it can wreak havoc on your life. Read below to find out how you can start building an emergency fund.
1. Create a budget or spending plan. Write down all your expenses for the month and your income. It is very important you notate the due dates as well. It’s not uncommon for most of your bills to be due at the first of the month. In turn, you may have to save money from your second paycheck (of if you are paid weekly, the third or fourth paycheck) to cover your bills at the end of the month. Understand there is not a right or wrong way to create a budget. You must do what works best for you. I also recommend that your spending plans are not extremely strict in the beginning. In fact, I set small goals for clients to accomplish and we build incrementally on their successes. As an example, I will challenge them to save $100 by a given date, then set a goal for them to save an additional $150 by another date, increasing the amount until we reach a $500 or $1,000 goal.
Track your spending over a two-week period. Most banks have online banking, allowing you easy access to your account and the ability to easily determine your spending habits.
2. Cut back on eating out and plan your meals. You would be amazed how much money you spend. I am a crockpot queen, which allows me to create no-fuss meals in advance. I do not suggest you eliminate dining out altogether. It would be a great idea to put yourself on a cash budget for eating out and once the cash is spent for the week you do not spend more money on restaurant meals.
– Check out the All Recipes website (https://www.allrecipes.com/recipes/253/everydaycooking/slow-cooker/)
– Plan your meals around sales. Weekly circulars for grocery stores usually update on Wednesdays. Get your family involved, especially the children, and give them a budget to plan meals.
– Leave your credit and debit cards at home. This was a big trigger for me, especially since I was an impulse buyer, as I would always find something to buy that was not in my budget. Face it, if you don’t have the debit or credit cards, you can’t spend any extra money.
– Pack snacks, bottled water and juice boxes in the car for your kiddos. If your kids are like my son, they are probably involved in a great deal of sports or extracurricular activities and in the car often.
Many parents do not want to cook when we arrive home. It’s so easy to stop and buy food at a fast food restaurant. Also, let’s be honest, our kids love eating out. I had a trick up my sleeve for my son. I began to pack snacks in the car and when he said he was hungry I would tell him to reach in the snack bag and grab something to eat. Take a guess at his response . . . bingo! He wasn’t actually that hungry after all.
Savings: $200 to $300 a month
3. Modify your cellphone plan and shop other carriers. Many companies are offering deals without contracts and low-cost monthly plans. There are many to consider such as Metro PCS, Straight Talk (which is offered at WalMart stores), Boost Mobile and Cricket or Tracphones which are sold at local grocery stores, CVS, and Walgreens. As an example, Boost Mobile has a graduated plan. If you stay with their company, your bill will be reduced by $5 per month and capped at the lower price.
Savings: $75 to $150 a month
4. When was the last time you checked your homeowners, rental and car insurance? There is a strong likelihood your insurance premiums are high. Premiums are determined by credit scores, location of where you live and other factors. You might be overpaying. First, call your insurance carrier to determine if your rate can be adjusted. If not, be prepared to hit the road. It’s very important before switching to find out the insurance ratings (for example, AAA) You can determine a company’s rating by contacting the Better Business Bureau. A good rule of thumb is finding an insurance broker. They can shop various companies and could possibly offer competitive or cheaper rates. Also, if you have more than one policy you are eligible for a discount.
Savings: $200 to $400 a month
5. Get rid of cable television. I personally have a basic Internet package, purchased a Google Chromecast stick and ordered Netflix. Also check out Amazon’s Fire TV Stick or Maono which can be ordered on Amazon as well. I have counseled numerous people and they are paying upwards of $200 or $300 for cable. That’s bananas!
Savings: $100 a month
6. Automate, Automate, Automate. First, open a savings account at a different bank or credit union, preferably one that is not easily accessible. Online is another option. As an example, my savings account does not have as many locations as my primary account, nor as many ATMs. Next, set up automatic deductions from your paycheck and have a set amount transferred to the savings account at another bank. Other options are apps you can download on your phone to help you save. Qapital is an app that will allow you to save automatically based on goals. The Digit app links to your bank account and transfers a certain amount of money on a daily basis. You set the parameters and can easily transfer the money back to your checking account. Another option is an old-fashioned water jug. Stash your change, or dollar bills. You can always seal the top and leave a small opening to insert money. This can prevent the temptation to pull out money at any given time. Also, your bank may have a coin counter, eliminating the cost of this service.
7. Cut back on kids’ extracurricular activities for a brief period. I must admit this is pretty tough, but understand that everyone will have to make sacrifices to accomplish the family goals. Having counseled numerous clients and reviewed their budget, I found that they are spending massive amounts of money on extracurricular activities while struggling to make ends meet. Some of their kids are on traveling teams, which is another additional expense because you must factor in gas, hotel expenses and food. Once again, I am all for involving children in various activities, but a short-term sacrifice can have huge long-term benefits for your family.
Savings: potentially thousands per year
8. Learn to say “no.” No is one of the first words we learned as children and was used quite frequently. I’m sure we can remember when our children were toddlers and replied to certain requests and directions with an immediate “no.” As adults we use this word less and less, and commit to things we do not want to do or can’t afford. I’ve been there! Face it, we are sometimes overwhelmed with birthday parties, holidays, weddings, etc. and the truth of the matter is that sometimes we simply can’t afford to participate. It’s okay to say “no.” Remember, short-term sacrifices result in long-term gain. It’s only for a season, and perfectly okay to share with family and friends that your family has set some financial goals and although you would like to participate, you must respectfully decline. Those who know and love you will understand.
9. Bank on your skills or talents. It amazes me how creative people can be, and how they operate in their gifts so naturally, never realizing these very skills that are natural to them can be quite bankable. As an example, you might bake really good cakes, be a great proofreader, or like to babysit. Turn these talents into a side hustle.
Take these tips and apply them to your everyday life, ultimately making them habits. Whether you are single or part of a couple, I would suggest carving out some time to look over your finances, without any distractions from the kids, cellphone or social media. Also, dedicate time to review your budget, at a minimum weekly. Create the budget in pencil and, once an item is spent, return to the budget and write, in ink, the actual amount spent. In turn, you will be able to see if you overspent in some areas and underspent in others. If you spent less than was allocated for a certain item, you can always apply it to savings. As you can see, I am not asking you to get a second job, but to reallocate money you are already spending, a simple awareness. Remember this is a process. Stay the course and stick to the plan, and short-term sacrifices will lead to long-term gain.
