DEBT MOM WANTS TO KNOW: DO YOU HAVE MONEY IN YOUR SAVINGS ACCOUNT?
A Good Habit
I remember the age old rule growing up which recommend:
Save 10% of every paycheck. Sounds simple enough, right?
But, are you actually doing that? Do you pay yourself first?
Maybe you’re a super saver and are already saving 10% or more, a paycheck.
If so you’re on the right track and have a healthy savings habit.
But if you’re reading this and don’t have an emergency fund or money set aside for life’s inevitable surprises, what are you waiting for?
Where should you begin?
It might be difficult to know where to start, or how to save. And when you’re in debt, saving seems nearly impossible. I know, because I’ve been there. And as the cost of living goes up, and the living wage stays the same, the paycheck can only stretch so far. So, what do you do?
Pay yourself first.
Treat your savings account like another bill that HAS to be paid. Make it a priority. Even if you can only afford $10 a paycheck or a week, it’s something. It’s the habit you’re trying to form. The idea is to be consistently putting something into your savings account, then you’ll see it grow.
You might not think that having an extra $100 in the bank is a lot, but it’s a start. From there you can scale up your savings goal. Personally, I believe having at least $1000 in your emergency fund is a safe amount. It might take a while to get there, but that’s when you have to really cutting things out, to get to that $1000.
Having a financial cushion is important.
Here’s my story.
When I got serious about paying off debt, I wasn’t trying to save up thousands of dollars. Because that’s not realistic. But I knew I wanted some breathing room and money set aside for those “just incase” moments.
So first, I set my first savings goal.
I wanted $500 in savings. Not because $500 solves every single problem. It definitely doesn’t. But it’s a good amount to cover a small plumbing repair, a flat tire, or the car insurance deducible.
I figured $500 was enough to make me feel a bit safer, like I wasn’t one mini-emergency situation away from another credit card charge.
When I hit that first goal of $500, something changed. For the first time, I felt like I was making progress instead of constantly putting out financial fires. I could breathe a little better, sleep a little sounder.
It was peace of mind.
Small Goals Lead to Bigger Goals
Once $500 was saved, I wanted more. I then moved my goal to $1000. All this time I was still paying off debts. But I was feeling a lot safer.
Trust me, the savings account definitely didn’t grow overnight, it was a gradual process. Making sure that every paycheck the savings account got a little fatter, that was real progress.
It became a game. And saving meant winning.
Here’s the plan.
Keep things simple.
- Cut out unnecessary spending.
- Set small savings goal.
- Be realistic.
- Stay consistent.
That’s it, nothing complicated. Just good old-fashioned wisdom.
You just need to start.
Debt Payoff Isn’t Just Math
Many think that having debt is just a math problem. But, I disagree. Debt is emotional. It’s a behavior pattern. Debt is about mindset. If paying off debt was purely mathematical, nobody would have debt.
We’ve all heard about scarcity mindset or abundance mentality. The way you think about money matters. It’s about how you view things. Your mindset can either keep you on track, or tell you to give up.
And sure it would be great to leave everything to the universe to sort out. But the universe isn’t going to pay your bills, or keep you on track. That part is up to you. And it can be overwhelming, especially when you’re doing it all alone.
What Worked for Me
Instead of choosing between debt payoff and saving, I did both.
Most of the extra money went to paying off the looming debt. HOWEVER, I first would put a small portion into savings. It was the first thing to do when a paycheck came in. This method might not be the mathematically correct way to but having a bit of financial security was necessary.
Did it help me stay consistent and avoid new debt? Absolutely 100% because I was creating a good habit.
And consistency beats perfection every single time.
Debt Mom’s Take
You don’t need to wait until you’re debt-free to start saving, and you don’t need $10,000 in the bank. This isn’t a perfect plan, because there’s really no such thing as a perfect plan.
Start with a goal that feels realistic. Maybe that’s $100 $250 or $500, and work up from there. I know building up savings sounds counter intuitive when you have debt and are paying interest on the credit cards.
Just remember that paying off debt isn’t just about reducing what you owe. It’s also about building a life where you don’t have to borrow money every time something goes wrong.
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