Add Saving to Your Budget – Or It Won’t Happen
Saving money doesn’t just happen. We make dreams and goals saying, “I’ll save money after my bonus,” or, “One day, I’ll have enough saved to go on vacation.” If you take consistent action, then that’s great, but many people only consider the notion of saving without actually doing it. CNN (though sometimes a source of dreaded fake news), states that 60% of Americans don’t have enough saved to even pay off an unexpected $500-$1000 expense. That’s a modestly terrifying statistic, which probably has some underlying, unstated variables affecting the data, but you get the idea – Americans don’t save enough.
Whether you’re American or not (unless you are Japanese and have a bank with negative interest), saving money provides a safety net, gives you freedom to take time off even when it’s unpaid, and helps build financially responsible habits. First, you must build the habit of saving, and you can do that by incorporating it into your budget.
If you are used to living paycheck-to-paycheck, start small. Too sudden a change will destine you to just withdraw from your savings, but a gradual shift with a small start can get you somewhere. Let’s say you spend $500 a week and make just enough to cover that. Unless your budget is as tight as tight can be already, I’m sure you can trim a tiny bit and save $10 a week. After a year of saving $10 a week, you’re already better off than 60% of Americans with your $520 in savings!
To go further with savings, it can require some substantial budget trimming. If you start with $1 a week, maybe add a dollar to that amount every week. That would be week 1 = $1, week 2 = $2, week 3 = $3, and so on until you’re at $52 the last week of the year. That will leave you at $1378 for just one year of savings, and if you continue doing that much or more each year, you’ll build a great safety net!
The point is, you don’t have to save big to save at all. You can start small, adapt your budget slowly to fit more in, and then be proud knowing that you are in the responsible minority who has sufficient savings. While I do have a great amount of privilege and support, I would not have been able to take the two month trip to Korea and Japan I’m on if I didn’t save money from every paycheck for over a year.
Best of luck,
-Andy
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Andy Cormier 