As spring is on its way, after a long and cold winter, I’m excited about all the outdoor activities my family and I can start doing again. Whether it’s a day trip to historic Colonial sites, an excitement filled afternoon at an amusement park or checking out the newest restaurants in downtown Richmond, we are ready to break our winter hibernation. With all of these options, it’s important for us to stay on track with our saving and budgeting goals, and so we try (to the best of our abilities) to use these simple saving tactics.
- We banish the money boogeyman. Like most relationships, my husband and I have different perspectives about saving, spending, investing and budgeting. It’s critical for us to talk about these difficult topics on a regular basis so that we’re both aligned and making the best decisions for our family. It also helps us avoid a bigger conflict later by addressing it upfront. For example, we have a budget threshold where neither of us asks questions about fun and frivolous purchases. Above that amount, we discuss how that purchase either helps make our lives easier, better or avoids negative consequences.
- We created and stick to a budget. There are literally hundreds of tools to make a budget, from automated app-based options to a simple spreadsheet. My husband and I are fans of the online automated options because it pulls from all of our accounts, from checking, savings, investments, bills and credit card statements. Since neither of us use cash frequently, it is an accurate tool to keep us on track when we are near our budget limits – when we spent too much earlier this month on going out to eat; we’ll pack a few more lunches next week.
- We make saving fun! I know, it sounds a bit ridiculous, but by creating clear and identifiable goals, we see the value of saving in a more concrete way. For the last few years, my young son has read, talked, drawn and dreamed about volcanoes. Because his enthusiasm is contagious, and dozens of books, documentaries, science experiment kits and posters have invaded our house, we are all now fascinated by volcanoes. Consequently, we are saving money towards a trip to see Mt. Vesuvius, Pompeii and Italy. Those savings no longer feel like a sacrifice. That money is the first step on our next family adventure.
- We zombie-fy our savings and spending. Like zombies, those mindless brain eating monsters of Hollywood movies, we automatically save a portion of our money before we see it on our checking accounts. We utilize the 401(k) saving options at our employers to automatically deduct a percentage of our income from our paychecks towards retirement. It’s (relatively) painless and we try to increase that amount when we’re able to do so to take advantage of the benefits of compounding. To avoid late charges if we forget to pay bills when life gets busy, we’ve also enrolled in auto-pay. We don’t need to remember that the gas bill arrives on this date, the electric on this date, etc.; they’re paid without additional effort on our end. The exception to this auto-pay is our credit card bills. We want to identify incorrect charges as early as possible.
- We reduce, reuse and recycle. Not just a catchy, save-the-world phrase, by trying to reduce, reuse and recycle, my family has been able to make progress on our savings goals. By trying to reduce our carbon footprint by avoiding unnecessary packaging, we try to buy in bulk when it is makes sense (yes to large packages of oatmeal, no to the giant tubs of macaroni and cheese). It often is cheaper per pound, and less need to frequently go back to the store. We’re also huge fans of our local library and take advantage of its brick-and-mortar locations as well as their online offerings. By borrowing and not buying our books, we’re saving money and space in our home.
- We believe in the super powers of prevention. Some of the biggest causes of unexpected expenses are medical, dental and transportation emergencies. To help address problems when they are smaller, cheaper and easier to handle, we schedule periodic doctor’s checkups, flu shots and dental exams. Fixing a minor cavity is simpler, lower cost and less painful than a root canal. We also have a reliable local repair shop that handles our periodic car maintenance. They identified straightforward repairs costing less than a hundred dollars that saved us thousands of dollars in future expenses.
With these simple techniques, my family is on our way to achieve our goals, both short-term and long-term. If you have any questions on achieving your financial goals through a financial plan and investments, ACG is here to help.