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The DNA of Saving?

MoneyWise

Christian talk radio with Rob West

May 31, 2022

Is there such a thing as a saving gene, a piece of DNA that makes a person put something aside for a rainy day? Sadly, no. We don’t inherit good savings habits. We have to learn them. We’ll talk about it today on MoneyWise. Saving begins with having the right attitude, one that makes you want to hang on to those hard-earned dollars. So the next time you’re at work, think about why you’re working, and it’s probably not so you can spend frivolously. Both spending and saving are governed by habit. The more you do something, the easier it gets. CHANGING ENGRAINED HABITS Now, have you noticed that it’s really tough to break a bad habit by just not doing it? It leaves a void. It’s actually much easier to replace one habit for another. In this case, you want to replace the bad habit of frivolous spending or impulse buying with the positive habit of saving. Obviously, you will need to be on a spending plan to get started. You have to know your income and necessary expenses each month, and that will tell you how much discretionary income you have. That’s your spending plan. START WITH A SPENDING PLAN And there’s no better way to set up your spending plan than with the free MoneyWise app. It has three different ways, including a digital envelope system, that you can use to put together your budget. Once your budget is in place, with the discretionary income you have left over, you can develop your saving plan. Don’t think of it as saving just to save. Instead, set goals for yourself. First is your emergency fund. Start with a goal of $1500. Then a month’s worth of expenses, then another, until you have 3 to 6 months living expenses in the bank. Notice how that saving plan is incremental and starts small. That’s important and very practical. START SMALL! Start with small, short-term, attainable goals. Trying to change too much too quickly often leads to failure and discouragement when it comes to changing habits. For example, don’t think I’ll save $1500 this year. Instead, think of it as just $30 a week. When it becomes routine to save $30 a week, increase it to 40 or 50-dollars a week until you establish that habit. Having short term, attainable goals like that is a natural brake on your spending. You’ll want to hold off on impulse buying so you can stay on budget and reach your weekly savings goal. BE CAREFUL Be very careful with debit cards. If yo’re using the MoneyWise app, it will alert you when you overspend in a category, but why not avoid it in the first place? Write yourself a sticky note that says, Have I reached my savings goal this week or this month? That little reminder can take the fun right out of over-spending. Here’s something else a lot of people don’t realize. The urge to buy a particular item usually has a shelf life. It will go away. So for small purchases, give yourself a 24-hour rule. Put it on hold for a day and see if you still want it tomorrow. Often, you won’t. For larger purchases, you can use the 30-day rule. It says to wait a month before buying anything over $100, unless it's an absolutely necessary expense. Here’s another trick. While you’re in that waiting period, don’t think about the price tag just in terms of money. You can also think about how expensive the item is in terms of your time. Divide your weekly paycheck by 40 so you know how much yo.netper hour. Then consider how many hours you’ll have to work to pay for that expenditure. Keeping those things in mind will definitely take the fun out of impulse buying. But remember, you’re replacing that short-lived fun with the satisfaction of knowing that you’re reaching your savings goals and staying out of debt! Saving isn’t a genetic trait. It’s an acquired habit, but it’s one you can learn! After awhile, it will become part of your financial DNA. On today’s program, Rob also answers listener questions: ● Are you able to get a portion of your spouse’s Social Security benefits? How does that work? ● Should you roll over a 403b account into an IRA? ● After paying off a house, does it make sense use freed up money for a car purchase? ● How should you manage financing surrounding an addition to your home? RESOURCES MENTIONED: ● Find a Certified Kingdom Advisor ● Ally Bank ● Capitol One 360 Checking ● Marcus

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