| Hi Taylor:
For some reason, even as my earnings go up, my savings stay flat.
I haven't made any big purchases or changes, so I feel like I need
some advice on how to save more effectively. - Calvin
Hi Calvin: This is a pretty common phenomenon, actually. If
your tendency is already to spend meaning you have the money
personality of a Spender you'll never save by default. You
have to make the conscious decision to save; otherwise, the money
that hits your bank account will leave as fast as it arrives. It won't
be easy, but here are some ways to save better.
twice… then a third time. Whether it's ordering the filet
mignon, splurging on a weekend getaway, or having the choice to
pay for parking instead of driving a little longer to find a street
spot, you need to sit through your first instinct. Your initial
reaction will almost always lead you astray because paying an
extra $10 or $20 doesn't feel like a big deal, especially as your
earnings go up. Unfortunately, as you're aware, all that spending
adds up and suddenly you've got nothing left over to put into
your IRA. As often as possible, you'll need to talk yourself out
of the easy, more expensive option.
2. Schedule retirement contributions. Part of the reason people
overspend is that they feel like money is just sitting around.
The solution? Get that money out of your bank account and into
a retirement account. At first, you might feel anxious about it,
like you need that money to spend and you're depriving yourself
of it. After a while, you'll start to enjoy investing, and watching
your retirement account grow over time is almost as much fun as
spending. If you need more motivation, putting money into an IRA
is spending! You're buying stocks and bonds and giving your money
a chance to grow. A little change of mindset will help you see
the benefit of saving without becoming bored.
3. Check your monthly fees. From utilities to insurance to
every other type of subscription, there's a good chance you're
paying for something that you don't really use. Or, and this is
just as common, you overpay for a service. When was the last time
you looked at your car insurance policy? Or looked over your credit
card statement to see what recurring charges are just slipping
through your fingers? If you don't mind spending, you might turn
a blind eye to bad spending. Fix that and you'll quickly
save a decent amount of money.
| You might not
be able to eliminate that urge to spend, but you can be better about
it. If you want to learn more about your money personality and find
some more useful tools, check out TheMoneyCouple.com. Thanks for writing
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.