I’ve been a saver for as long as I can remember. I tried to save what I could when I could.
Working for tips at a younger age, I remember making deposits of my daily tip money in a shoe box wrapped in duct tape (my version of tamper proof) with a hole big enough to insert a folded stack of cash.
I used a sticky note with a paperclip to mark the date and amount I earned. I’d count the money and deposit it into a bank savings after 6+ months. It wasn’t a lot of money but this was a great way to save. In retrospect, I was essentially forming a new, pay-yourself-first habit.
The more I saved, the more I began to compare the buying power of my total savings to material things I could purchase in cash if I wanted to. Funny thing, though, once you have a good pile of money saved up, you tend to think twice about spending it.
I got hooked on savings.
To keep myself focused and entertained, I customized a wallpaper and made it my screensaver. On the wallpaper, I printed the running total of how much I had saved compared to a progressive savings goal—$5k, $10k, $20k (see image).
It became addicting. I loved updating the dollar amounts on the screen as I got closer and closer. It was a constant reminder to stay focused every time I turned on my computer.
As my savings grew, it wasn’t always easy to stick to it. I needed to find a more compelling reason to keep me from spending and saving more.
So, I started to measure my savings by the length of time I could survive if I ever lost my job. I didn’t like my job at the time, so this became my biggest motivator.
The math was simple then (savings / monthly expenses = # of months without a job).
I remember my attitude about work changed just as I began to hit major milestones. At the 6-months point, I had a spring in my step, it felt like I was getting closer to F-you money. Not exactly F-you money yet, but relatively speaking I had arrived. Man, it felt great.
Today, I’m saving a larger percentage of my net income. My motivation is similar only more finely tuned. The math is a bit different, but still simple (25 x yearly expenses). My ultimate goal is financial independence and early retirement (FIRE)…number of months without a job = forever. Now that’s F-You money.
The hardest part of saving is remembering why your doing it. Your personal ‘why’ has to be compelling enough, yet attainable and measurable. Find your motivation. Keep it simple. Pay yourself first. Make adjustments as your life changes. Keep score of your progress.
Big goals are okay, but give yourself reachable savings goals along the way. As you accumulate more money, you might find it harder to resist the urge to spend. You’ll try to justify spending your money to reward your good efforts. This is okay but within reason. Be careful not to inflate your lifestyle. Spend wisely.
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