How I Saved My Financial Sanity: 4 Lessons Learned
In a post I wrote over a year ago titled "Emerge," I discussed the turn of events that led me to begin the journey of getting out of debt. "Save for a rainy day" is what they always tell you, but no one really tells you how to do that. And while it seems like a simple task, it's one of those lessons that many of us don't learn until we end up in a sticky situation.
After an incident where I wasn't able to buy myself a simple bowl of ice cream, I came to grips with the reality that I was living far beyond my means. One of the most tiring and frustrating things in life is scraping by check to check, and never being able to figure out where all the money is actually going. Then, on the day that I couldn't even purchase a new car battery because I'd lost track of my funds once more, I decided that I'd never again get into this kind of financial situation. Instead of living and spending carelessly, I'd learn how to manage my money with the small income I had, and find a way to save as much as I could as quickly as I could. I decided on a trial period of five months.
Finding the Money
At first, I worried that it would be impossible to save. I didn't know the first thing about saving, and I had no clue where to start. My mom gave me a little tip about tracking my spending: She told me to carry a notebook in my purse and log every single penny I spent in a month. I just knew that I was doomed to fail at this; I lacked follow-through, for one thing, and it was also urgent that I save money fast. I had a goal to meet and a specific timeline. I couldn't stand the thought of being flat broke for another second, let alone the next 30 days while I experimented in tracking my spending.
I wasn't disciplined or patient enough to commit to tracking my spending for the next 30 days. Fortunately, I'm a receipt hoarder, so instead, I sat at my dining room table one evening, with a pile of receipts before me, and added up the total going back 30 days. This helped me identify frivolous spending, such as buying lunch every day, partying and eating out with friends, and even ridiculous parking prices. None of these were needs. I asked myself if I would miss these things if I'd never paid for them in the first place. The answer: flat-out no!
Putting It All Together
After adding up these miscellaneous purchases, I found that I'd squandered 420 bucks in 30 days. I was in shock that I'd spent that much money on things with no tangible or lasting value. Add to that a $200 grocery bill for one person, and I was up to over $600 in one month -- which didn't include my most important expenses, such as my car payment, insurance, and rent.
I made up my mind that night to save hard, no matter what. I wrote out a plan not to hang out as much (I knew that I still needed some social life), to start making and taking my lunch for work, and to park for free half a mile from my workplace and walk. These small acts alone would save me a whopping $150 per week. Then, by planning my meals, shopping strictly from that "menu," and allowing only $15 for "extras," I was able to cut my grocery bill by $70 monthly.
Even with a solid plan, I knew that I didn't have the willpower to completely stop spending. Instead, I took the next best step I could think of -- which proved to be the best thing I could have done for myself. I opened a savings account at a separate bank from my checking account. I opted out of the debit card, so that I wouldn't be tempted to withdraw any money. Then, I set my savings on auto-pilot by changing my direct deposit for my paycheck to allot $200 per pay period into the new savings account.
Leaning Into the Pinch
For the first month, I felt the burn of having $400 less to access immediately. Over time, I adapted to my new budget. If you just don't have the money accessible to you, you learn to live without it. I still treated myself to lunch, but limited that splurge to Fridays only. Aside from being free, another benefit of parking farther from work was that I added a little exercise to my day.
After five months, I'd not only adjusted well to my new budget, but also managed to amass $2,280.00. This savings meant that I didn't have to live in fear that I wouldn't be able to cover anything else that life would throw at me financially.
When I put myself on this financial diet, so to speak, I learned a number of things.
- 1. Money is too easy to spend if I don't spend conscientiously. I needed to be wiser about it if I wanted to continue to grow financially.
- 2. The "save-first" or "pay yourself first" philosophy is, for me, the only way to go when it comes to saving.
- 3. I learned how to live below my means.
- 4. Finally, I found that I was still able to go out and do the things that I enjoyed but only when it really made sense budget-wise.
Since I made and stuck to this savings plan, I've become a wife and a mom. I've been able to keep up with my "save-first" philosophy to the point that I've even been able to begin saving for my boys' future. I'm glad that I learned this lesson before I had a family, because it's something I will continue to share with my husband and teach my boys as they grow. Although saving has slowed since I haven't been working, I'm still able to put aside a bit of money per month, and I've even felt secure enough to start dabbling in the stock market.
There is still so much more I have to learn in life, but I'm glad I learned this important financial lesson sooner than later. It's best to always have that umbrella handy before it starts raining.
This post is part of BlogHer's Goal, Accomplished editorial series, made possible by P&G Always Infinity.