Don't buy stuff you can't afford so you can save money

If you don’t know where part of the title is from, check out this skit from Saturday Night Live (SNL), "Don't buy stuff you cannot afford."  It’s okay… I’ll wait because it’s totally worth watching. This is one of my favorite SNL clips and not just because it's hilarious or even because I'm a Financial Counselor. It speaks to all of the values that were taught to me growing up - yet I still had to learn the lesson the hard way.

If you don’t have savings, you are NOT alone. Nearly 26% of adults in America don’t.  I always told myself that I’d have savings once I got a raise or once that credit card was paid off. And then one day I realized if I didn’t start NOW I never would! Once I started building savings, I saw my credit cards go down AND STAY DOWN.

Avoid the debt trap that comes without having savings. It may be hard to get started, but it CAN be done.

Monthly

If you create a budget and it shows that you have (or should have) money left over, then you should really start saving money monthly.  The key here is if you should have money left over MAKE YOURSELF have money left over.  This is where the saying “pay yourself first” comes from.  It’s easier for the money to find other places to be spent if it’s there staring at you.

By having the money already in savings, you’re less likely to spend it on something you don’t need. The best way I have found to do this is with direct deposits where you set up a certain amount of your check automatically go to savings. Some people find they need to set up a separate savings account (sometimes even at a different financial institution) and purposely not set up an online account, just to avoid taking the money back out.

The most important thing to remember is that you don’t HAVE to save a certain amount at a time. People tell me, “I only had $10 left over so it wasn’t worth it.” But that money CAN make a difference, especially when it’s added to on a regular basis. Don’t get distracted by the amount you are saving, just get in the habit! You will find it’s easier to save more over time.

Periodically

Sometimes budgets are tight and there is NOTHING left; even after cutting expenses down you may find that you are just breaking even. That doesn’t mean you can’t save… it just means you have to be more determined to do it.  This is where saving change can be helpful, but think bigger, too. If you get a tax refund don’t let that money just slip through your hands or buy things just to spend money. It’s hard to feel broke and live paycheck to paycheck, but ask yourself this: does it feel better having a large sum of cash and then it’s just GONE right away? Before you get a tax refund, plan out what you are going to do with it. How much of it should be saved?  Again MAKE it be saved. Set a goal of half, a quarter, or a certain dollar amount.

Savings can feel really good once you have it. So, the next goal is to make sure it’s there when you NEED it. Set limits for yourself on what you can use it for.  If you don’t, it is very easy for the savings to dwindle when you buy things on impulse. Make a pact with yourself about what you will allow yourself to spend your hard-earned savings on and you’ll find it’s there when you really need it. And that’s how you get saved money.

Creating a plan to pay down debt more quickly is a great way to help meet your savings goals faster. If you don't yet have a plan, LSS Financial Counseling can help. Get started online or call us at 888.577.2227 for an appointment to see if a Debt Management Plan will help you. And get this: with on-time payments your credit cards would be paid in full in five years or less! What have you got to lose... besides debt? Take action today to eliminate your debt for good.

Author April Sanderson is a certified financial counselor and partner relations specialist with LSS Financial Counseling. Her specialties include debt, budget, and credit counseling.