Saving money is no small project. The latest research tells us that 62 percent of all Americans have less than $1,000 in savings.
The reality is that saving is more a matter of mindset than it is the amount of money you make. The evidence of this is the number of people, despite being low-income earners, who have managed to amass large estates and leave them to benefit others. I read of one woman last month who earned a modest income all her life but pledged to educate one class of first-graders. She paid for 19 members of this class to go to college.
Just saving money isn’t very sexy or compelling. Let’s look at ways to work on the money mindset that leads to a saving attitude.
Remember why you are saving and save for something specific. Whether it is your retirement, a new car, vacation to Europe or your kid’s (grandkid’s) education, you are more inclined to put money into savings if it is for a specific reason. My savings jars are labeled with each of my grandkids’ names with the understanding it is for their education.
In addition, you are more likely to save if you put a date on your savings goals. Knowing that you want to travel to Europe in three years will lead to better goals. Once you have set the three-year goal, it will lead to the question of how much will it cost and then, how much do I have to save per month to get there? The more specific, the better your goals will be.
Concentrate on what you have, not what you don’t have. This simple act keeps you from planning for the next thing you are going to buy with your hard-earned money. I’ve also heard the recommendation to “live like a pauper.” The less you spend, the more that remains behind in your accounts to save for the future. This money mindset is the premise behind “The Millionaire Next Door” books. The idea is that your income increases but you don’t change the way you live, which, in turn, leaves more money in your accounts, unspent.
Adopt a frugal mindset. I didn’t say cheap, I said frugal. That may mean you spend more on an item, as long as it will last and satisfy you for a longer time. Make it a game. Whenever you are tempted to spend money, think about how you might get that final result at a lower price. One of my favorite examples of this was something my boys did for their sister when she was in high school. When it came prom time, she and her date couldn’t afford the obligatory dinner out before the prom. One of her brothers cooked a meal and the other two dressed up and served them a supper at a fraction of the cost. If we think about this, the idea can be adopted in a million ways each day. Watch movies at home instead of going to the theater, cook at home instead of eating out and buy clothing that will last you a decade instead of a year.
Don’t forget fun. There is nothing that will make you go off the not-spending bandwagon quicker than feeling downtrodden and hopeless. Set aside a small amount of money for fun. It might pay for an ice cream cone instead of a dinner out, but make sure you allow adequate funds to simply enjoy yourself.
Adopting a positive mindset about money is the key to being successful in saving money.
Roxie Rodgers Dinstel is associate director of Cooperative Extension Service, a part of the University of Alaska Fairbanks, working in cooperation with the U.S. Department of Agriculture. Questions or column requests can be e-mailed to her at firstname.lastname@example.org or by calling 907-474-7201.