Want to Save More Money? Make Your Savings Hard To Get At

The first step to financial fitness is savings. Everyone should have a savings account. The problem is that even though many do have one, there never seems to be much money in them. And that's because our savings account is usually the first place we look when we're a little strapped for cash.

If you want to reach your savings goal, you have to keep that money out of easy reach...and no I don't mean a cookie jar on the top shelf. It's for your goals...the things you decided you needed to be prepared for life's foibles. It is  not for those moments when you're temporarily a little short on cash. 

So how do you keep from dipping into the piggy bank?  Here are some ways to make your savings VERY hard to get at:

1. Keep your savings account at a different bank than your primary bank. Having both your primary checking account and your savings account at the same bank makes it too easy to just transfer money from savings if you're a little short on cash. If your debit card is linked to your savings account, that's even worse. Now you can access your savings from almost anywhere! 

I recommend keeping your savings in a totally separate online account. This will definitely cut down on the speed with which you can access your money, which means you might be more likely to look for ways to stretch your dollars until your next payday, instead of pilfering your savings. Plus online banks often pay a higher interest rate on savings than your neighborhood bank. 

If you would prefer to use a brick-and-mortar bank, then open a separate savings account at a bank you don't normally use. Preferably on the other side of town. Do whatever it takes to make taking money out of your account as inconvenient as possible. 

2. Do not link your debit card to your savings account. Again, this just makes it too easy to access your savings. Many banks will give you a card automatically when you open your savings account. They might advertise this as a benefit of setting up an account with them, but it's not. So if you have the option, tell your bank you don't want it. If you already have one, cut it up. If you simply can't imagine not having one, then at least keep it locked up at home and not in your wallet.

3. Reduce the amount of your contributions if necessary. Let's be real. If you are putting a substantial sum into your savings account each month, only to take some of it out again each month, something isn't working. 

It's much better to put a smaller amount in your savings each month and LEAVE IT THERE.

One of the easiest ways to grow your savings is to put money in an interest-bearing savings account and don't touch it.

Have you found yourself dipping into your savings more than you should? How have you stopped? Share your tips in the comments. 

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Know How Much You Need To Save

The first step to making sure you won't be running out of money in an emergency is to know how much you'll actually need. Yes, I know...the typical advice is 3 - 6 months of expenses. But do you know exactly how much you REALLY need?

Don't use guesswork. "I make $4000 a month so that's how much I need." Maybe. It depends on how that $4000 is spent each month. If it all goes to cover essentials, you are correct. If not, you could possibly manage for a bit with less.

You can get started by determining where your money goes each month. This is somewhat like making a budget. Add up all of your income for a month. If you're a dual income family, both paychecks count. Then add alimony, child support, any income from side hustles, investment income...if money comes in to your bank account, add it to your income.

Next take a look at your expenses. Which are absolutely essential? Rent or mortgage payments, food, utilities, obviously. But what else do you absolutely have to pay each month? Car payment? Probably. Insurance and vehicle maintenance costs (this includes fuel in my book). Is anyone in your family on regular medications? They'll need to keep taking them. Childcare? That could depend on the type of emergency. I would always err on the side of caution. Better to have more than you need than not enough.

Anything that does not have to be paid each month...meaning it's something you don't need for survival...is non-essential and can be cut if need be. You can live without cable TV, or your morning Starbucks run. You won't die if you miss a spa day. 

Add up your total monthly ESSENTIAL expenses. Multiply by six. That's how much you need to have saved for emergencies. 

Now...how to do that.

Many experts recommend saving 20% of your monthly income. That's great. If you can do it. But if you are already stretched thin, taking out 20% could be difficult. Start where you can. Something is better than nothing. The important thing is to get started saving now! The sooner you start, the sooner you will have your financial cushion ready for emergencies. If you can only save $5 a week, do it. But do it consistently! Once you figure out how much you can save each month, do it EVERY MONTH! No excuses. A little self-sacrificing now may make all the difference in an actual emergency.

Check out these posts for some additional information on saving money:

Why Did I Buy Those Shoes?!

Set A Savings Goal

The First Step to Saving Money - Spend Less Than You Earn

Got a College-Bound Kid? Invest in a 529 Plan

As the grandparent of a college-bound teen, do you want to know what I have learned? College is EXPENSIVE! And it's expected to just keep getting more expensive. 

Fortunately, we are in a position to be able to help him with tuition so he won't have to graduate under a mountain of debt. But it would be so much easier if we would have known that his dreams of a military career would be dashed by health issues. We would have encouraged him and his parents to prepare for his college days themselves! 

It's a little late for him to really start saving. But it's not too late for anyone else who may have children dreaming of college in their future. There are lots of ways to start saving money for college. One of the best is the 529 plan.

A 529 plan is like a 401k for college savings. You put money in, get a tax deduction, and allow the money to grow tax-deferred for the purpose of paying future college costs.

I am not an expert on them by any means. So before investing, I highly recommend you educate yourself so you understand them. But I will share some basic reasons why you should open one if college is in your child's future.

1. High contribution limits: 529 plan limits are set by the states. Limits vary from state to state. California currently has the highest limit. Mississippi has the lowest. But even at a $235,000 limit in Mississippi, that still makes quite a dent in a hefty college tuition bill!

2. They are tax-deferred: Your contributions and earnings grow tax-deferred. And as long as you use the money for qualified education expenses, your withdrawals will also be tax free. 

3. Flexibility: Your 529 plan is not limited to paying tuition. It can also pay for books and computers. And it doesn't just cover college. You can use your 529 plan for other post-secondary qualified training. 

4. It's easy to invest: Most 529 plans make it very easy to invest. They are professionally managed so they have choices like pre-set asset allocation models and age-based options. So if you're not an expert on investing, no worries! Let the professionals handle your allocation and use the age-based model to lower your risk.

5. No tax reporting - if you use your 529 plan for qualified expenses: This definitely makes your life easier at tax time. There are times when you will have to report such as if your withdrawals exceed your qualified education expenses.

If you have a college-bound kid, you definitely want to invest in a 529 plan. With college costs rising annually, it can be challenging to know how much you will need. But if college is on the horizon, any amount you can start investing in a 529 plan can only help.

An Abundance of Money

I used to think that all I need to be financially secure was to make more money. With an abundance of money anything is possible. Unfortunately, this isn't true. How do I know? When you make $97,000 a year and still don't really have any savings, your credit cards are maxed, and you are still living paycheck to paycheck...something is not working.

Obviously I had the "making money" part down. So why was I still struggling? The answer...I still had a poverty mindset. So today's smart money advice isn't going to be about how to make more or save more or invest better. It's about improving your money mindset. Because if you continue to go through life with an attitude of lack, it won't matter how much money you make. You won't be able to keep it.

And you do want to have more money...right? Who wouldn't like to be rich? I'm sure we all want to create wealth and abundance in our lives. If you don't believe me, just ask Google how to make more money and see how many hits you get! There are more than enough website out there wanting you to spend your money so they can show you how to make more. Literally trillions! But none of them teach you how to keep it once you have it. If you learned how to do that you might not purchase their next big thing guaranteed to make you more money!

Most of us get our attitude towards money from our parents. If you read my blog post What My Parents Taught Me About Money, you will understand why I struggled. I was basically taught how to be poor. And it was a lesson I learned very well.

The good news is that you can overcome the lessons you learned. You can basically reprogram your entire belief system around money. It takes time. It takes effort. But it can happen. 

So what do we do to combat our negative programming? Here's some tips:


1. Be aware. That's the first step. Acknowledge that you do it and make a note, mental or otherwise, every time you catch yourself.


2. Identify where the thoughts are coming from. For example, the "people like us weren't meant to be rich" comes straight from my mother and has no basis in fact. There are people in my family that have done quite well. Why can't I?


3. Turn it around. Whenever you catch yourself thinking a negative thought, replace it with the opposite. "Money doesn't grow on trees" becomes "I am prosperous and have more than enough to meet my needs." "People like us weren't meant to be rich" becomes "I am a 6-figure earner." When I catch myself about to make a poor spending decision (like another pair of shoes or a dog!), I remind myself that I am not my mother and I now make smart money decisions.


Our past lessons don't have to become part of who we are. Keep the good stuff. Replace the negative. Positive self talk and affirmations can help you reframe your thinking.


Ready? Repeat after me.


"I am prosperous and have more than enough to meet my needs.
"I am a 6-figure earner."
"I will make more money this month than last."
"I effortlessly attract abundance."
"I am finding new income streams."
"I use money to create a better life."
"I release my money worries."
"I am financially empowered."
"I enjoy making money."
"I will have zero debt."
"I look at my finances without fear."
"I make money while I sleep."
"I am going to make a crap-ton of money today!"
"I am smart when it comes to making important financial decisions."
"I have money making ideas all the time."
"I have wealth in all areas of my life."
"I am worth the money I charge."
"I have multiple streams of passive income."
"I am a rich, powerful woman" (Or man)

The First Step to Saving Money - Spend Less Than You Earn

Preparing for any emergency - whether it be loss of a job, unexpected expenses, illness, or whatever may come your way will require some money. It's just a fact. If you have a financial cushion built up, you will be able to be unemployed longer without worry. You will be able to cover emergency repairs or medical expenses without going into debt. You will be able to purchase the things your family needs to survive and thrive without stress.

The first step to building that cushion sounds easy but often is more difficult than it seems. Spend less than you earn. 

Well that's not hard, you say. But how many of you are actually doing it? Very few, if the truth were known. I make really good money and I still have problems with it sometimes. We all want nice things. And nice things cost money. (And yes...I got a really good deal on the brand new Jeep Gladiator you saw on Facebook so I am still within my budget).

My daughter reminded me the other day that I used to have quite the spending problem. Growing up poor meant I did not have many of the things other kids had. And I vowed my kids would never go without the things they wanted. And what was wrong with buying a few nice things for my husband or my parents? My problem was never buying for myself. But I would spend on others with no thought at all about the expense or if this was a necessary purchase. It wasn't until I discovered a Christmas present from the previous year sitting in my grandson's closet, still unopened, that I realized I was overdoing it. And all that spending soon created huge credit card debt to the point that I found myself unable to pay my bills on time. When I broke my glasses and couldn't afford a new pair because I had maxed out my cards and had no savings, I knew I had to make a change.

Here's how I did it:

1. I am naturally competitive so my first step was to set a goal of how much I would save each week. The challenge of reaching that goal was often enough to keep me from reaching into my wallet. Once I discovered how much fun challenging myself could be, I used it in other ways. How much could I reduce my grocery bill? Could I get a great bargain on any new purchase? Could I find cheaper, better ways to live my life? It became a game. And the prize was an ever increasing amount of money in my bank account.

2. I enlisted my family. The rule was I could not spend anything above a certain dollar amount without discussing it with my family first. Household purchases were discussed with my husband. Purchases for the grandkids were discussed with their parents. For my kids, I talked to their spouses. The discussions were designed to help me understand whether this was a worthwhile purchase. It wasn't based on price. Heck, we bought the grandson his first car. But it was based on NEED and VALUE. Needs were always approved. WANTS were approved if it fit within our budget and provided value. And on the rare occasion I did want to purchase something for myself, I soon developed the habit of walking around the store with the desired item in my cart while I questioned myself as to whether I really needed it. Most times, I would talk myself out of whatever item had caught my eye before I headed to the checkout.

3. Speaking of NEEDS vs WANTS, I learned to differentiate between the two. When my husband saw what I was doing and decided to join me, we took a good look at where "our" money went. And discovered many things we were paying for that we could live without. Cable TV? Gone! Weekly dinners out? Gone! Subscriptions and memberships we didn't use regularly? Gone! Gourmet coffee and "artisan" foods? Gone! And the great thing is - we don't even miss any of this stuff!

4. I learned my triggers. I don't have many vices. But I do have a couple. Books. Music. Jewelry. Shoes. My husband took a pictures of the stacks (yes, plural) of books that hadn't been read, the mountain of CDs that had not yet been opened, and the tangled mess of jewelry I had never worn and presented them to me one day. And how many pairs of shoes does one woman need? So I set rules in place to help me compensate. I can't buy a book until I finish the one I just purchased. I can't buy a CD until I listen to the one I just bought. When I am shopping, I no longer use a cart. It's amazing how fast you will talk yourself out of something once you get tired of carrying it around the store while you shop! If shopping online, once I load everything into my online cart, I leave the website until the next day. Often by then, I will discover I didn't want the items nearly as badly as I thought I did.

5. Here's the big one. I cut up most of my credit cards. I do have a couple that I use for travel or if I just don't have the cash I need on me at the time. I think this was the hardest for me, but it was so beneficial. You can't spend what you don't have! Well, actually with credit, you can. And that's a bad thing. So the rule is if I can't pay cash now or know that I can pay off the credit card debt in 90 days or less, I don't make the purchase.

Spending less than you make is physically quite easy. It's mentally and emotionally hard! Buying things makes us feel good. One of the rules of marketing I learned was that people buy based on emotion and then use logic to justify their purchase. The trick is to find other ways of creating that emotional rush without spending money. Reaching my next savings goal feels gives me warm fuzzies. Knowing I negotiated major savings on a large purchase feels GREAT! Knowing that when we truly need or want something, we can just write the check is priceless.

Try these ideas for yourself. Start saving for the things that are truly important in life and stop wasting money on things that provide no lasting benefit.

If you have some tips on how to spend less than you make, share them here! We can always use some new ideas!

  

Set A Savings Goal

Having trouble saving money? You're not alone. Saving money is often easier said than done. But just like any other area of your life, having a clear goal can help make it a bit easier. And just like any goal you set, it helps to do it right.

How do you set a clear savings goal? Isn't it just like a weight loss goal? You want to lose 50 pounds in 6 months. Goal set! You want to save $500 in 6 months. Done! Right? Maybe...

When setting savings goals, it helps to know what you want the money for. If you merely decide to save $500 in the next 6 months, and then in month 7 you see a great sale on TV's and purchase it, have you accomplished your goal? Theoretically. But now you're right back where you started...unless buying a new TV was your ultimate goal.

Ready to set some SMART savings goals? Here are some tips to help

1. Determine what you are saving for. This will depend on how prepared you are already. Do you have an emergency fund already established? Do you have money saved for retirement? If not, I recommend you start with these. First, 6 months of living expenses as an emergency fund. Then start putting some money aside to invest for your future.

2. Assess your situation. Unlike weight loss or many other goals, savings goals are often dependent on outside factors. If you decide to lose 50 pounds in 6 months, you can most likely achieve that goal if you are willing to do what it takes. But if you decide to save $500 in 6 months while every dollar of your paycheck is being used just to meet basic expenses, that may not be a realistic goal.

This is where you need to take a good look at your spending habits. First, determine your monthly income and include EVERYTHING! Salary, alimony or child support if you receive it, income from a side hustle if it's reliable. You aren't sharing this with the IRS so every penny of income must be included, even if it's "off the books."

Now do the same thing with your expenses. Where does your money go each month? Rent or mortgage payments, food, clothing, car payment, gas, utilities...everything gets included. If you have trouble remembering, check your bank statement. That will give you a pretty good idea of what you spend your money on.

Once you know exactly how much you bring in each month and how much you spend, subtract cash out from cash in.  Is there anything left? That's how much you have to play with.

3. Based on the results from step 2, you have choices. If what you have left over each month is enough to enable you to reach your goal, then good. You're done. Decide where you are going to keep your savings until you need it. Emergency funds should be handled differently than retirement savings for example.

If you don't have enough left over, you still have a choice. You can either modify your savings goal or change your spending habits. Personally, I recommend changing your spending. In order to meet my savings goal, I stopped my cable subscription, my daily Starbucks run, the monthly manicure and other non-necessities. You can do the same. Examine your monthly expenditures for things that are not necessities. Wants rather than needs. Can you give some of them up to meet your goals? It turns out I can get Netflix free with my phone plan. That and a $20 HD antenna and I have all the television I need. Saving Starbucks for an occasional treat has not only helped my put more money in my bank account, it has also helped my take off a few extra pounds. And I have discovered doing my own nails as part of my weekend 'me' time is actually very relaxing.

Did you find a few more dollars to add to your savings goal?

4. Track your savings. Check on your progress from time-to-time to make sure you are on track to meet your goal. And don't stress if you slip up one month. Pick yourself up and get back at it the next month.

5. Reward yourself as you reach milestones along the way. This can help you stay motivated and on track to meeting your new savings goal!

Why Did I Buy Those Shoes?!

Have you ever thought about why you make the decisions you do? If you are going to say they are all based on facts, on research, on logic, I'm going to say one thing.  Wanna bet? Even the most logical and thoughtful of us make decisions based on inner needs and values that we might not even be aware of. 

In my post, "What My Parents Taught Me About Money" I give an example of how the messaging I received from my parents informed most of my financial and business decisions for years, totally without my consciously realizing it. So despite my very logical voice inside my head telling me to take my annual bonus and invest it or save it, my mother's voice was telling me that it was impossible to keep to a budget anyway, so go ahead and treat my family to something fun. And when it came time to invest in something for my business, even though I knew in my heart this was a good idea, I could still here my father reminding me that money doesn't grow on trees and I shouldn't be so frivolous with my spending. It wasn't until I did some deep soul-searching that I discovered where my thoughts were actually originating from and was able to overcome them.

Parents may not be the only source of our inner values, although they can be the main drivers. We can also be influenced by friends and peers (how about keeping up with the Joneses), teachers, coaches, mentors, religious beliefs (have you been taught you must tithe, meaning give 10% of your earnings to the church, no matter what?), and even the media (how many of you panicked during the pandemic when your 401K lost money?).

Every time you make a decision, you tap into your values in search of the choice that will move you away from frustration, fear or discomfort and toward peace and calm. Every time you make a decision, you look for the option that will make you most comfortable. Whether you know it or not, you sometimes choose options that are not good for you because they are easier and cause less stress in the moment. How many times have any of us acquiesced to our spouse's desires just to avoid an argument? Even when we knew it was not the best decision?

The definition of insanity is doing the same thing repeatedly and expecting a different result. You are here because what you have been doing until now has not brought you the financial security you desire. If order to see different results, you will have to make different decisions. And now that you know that your decisions may not actually be fully your own, you can learn to stop and actually think about what YOU want instead of what your mom, dad, and so on, may have taught you that you want.

So yes...sometimes you might really want to buy those expensive leather boots, or the big gas-guzzling car, or the home with the pool instead of making more economical choices. And that's okay! As long as you can still meet your financial goals, it's okay to splurge every once in a while. And yes, it's okay to sacrifice to meet long-term financial goals, as long as you remember to have a little fun once in a while.

I invite all of you to read my post What My Parents Taught Me About Money. Then do some serious soul searching to see if your childhood experiences impact your financial decisions. Then look at what other forces influence your thought process. This is the first step to changing your behavior. It doesn't mean you won't ever make less than perfect decisions. But it does mean you will at least know WHY!