Fall in Love with Your Savings
It’s the month of love, people! We’re concentrating on the most important love: the kind we have for ourselves and for the lives we’re creating. The best way to love ourselves is to invest in ourselves. For that reason, we’re kicking off a new series for each Tuesday in February: “Fall in love with…” highlighting the best things to fall in love with to invest in yourself.
Today’s topic: fall in love with your savings.
Similar to falling in love with our budget from last week, building up and staying on top of how much money we are saving for the future is a key element to financial freedom. Having a full savings account means we are prepared—prepared for an emergency, prepared for an unexpected bump, and prepared to say yes to future dreams & opportunities.
For me, this quote by Aristotle perfectly captures why we’re working on our relationship with our savings account:
“Money is a guarantee that we may have what we want in the future. Though we need nothing at the moment it insures the possibility of satisfying a new desire when it arises.” —Aristotle
So, why should you make Savings your main squeeze this February (and for happily ever after)?
Saving’s Got Your Back
There’s a difference between Emergency Savings & Future Savings. And when you make that distinction, you’ll see results! Your Emergency Savings Account should be enough money to cover minimal life expenses as you get back on your feet after a life upset. (Think losing job or unexpected, prolonged sickness or natural disaster) Experts suggest anywhere from 3 to 6 months of living expenses is the goal, but you can determine what feels right for you. Hopefully it never will, but this is your back up plan for anything going wrong. Once this account has your predetermined amount, then you can start putting money into your Future Savings. Future Savings is the fun savings, and its limit is determined by what you’re saving for.
Saving Satisfies Current You
So often, we spend, spend, spend throughout the month, and at the end, we say there’s nothing left to put towards savings. But a crazy thing happens when you prioritize your relationship with your savings & save first, spend second. There’s enough. There’s enough for your rent and groceries and car and the unexpected costs too. Most of the time, it doesn’t even feel like you’ve restrained your spending. It’s at this point, you realize how much extra you’re spending on things you don’t really need. In turn, we become satisfied with what we have now, especially because saving for our future starts to feel real good too. Knowing we have an Emergency Savings Back Up Plan and that we’re working on building our Future Savings Account too helps us realize we have enough & start prioritizing future goals. An easy way to find contentment now is to ask yourself, “What am I currently saying yes to that will force me to say no in the future?”
Saving Loves Future You
Money is an exchange of worth. Think about it, your employer has determined your salary based off what the work you do is worth. Similarly, when we spend money, we are subconsciously asking ourselves what the goods & services we are purchases are worth. At one restaurant, you may decide your meal is worth it and spend $20, but no one is going to pay that much for a fast food burger. Cold soggy buns just aren’t worth $20, right? Similarly, we can think of our Future Savings Account as what our future is worth. When we pay ourselves first and save our wealth, we are choosing to love our future self and her desires. Maybe she’ll want to go back to school or make a down payment on a house or take a dance class—whatever it is, savings is saying “She’s worth it!”
But like all relationships, putting Savings on the back burner isn’t going to work. It’s so tempting to give the people in our lives and our savings account “what’s left” when we’ve given it all to everyone else. But that can’t sustain a relationship, nor can does it keep a healthy savings account happy. Similar to our budget, we’ve got to make Savings a priority and pay ourselves first. That literally means take out your savings at the beginning on the month or when you get paid so you can’t forget or overspend. It means determining what your desired amount is that you’re building up to. And it means creating a worse-case scenario financial plan because you’re looking out for you.
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