The Bottom Line

I only ask because my husband is, and really always has been one of our many obstacles to saving money. He is my little spendthrift. Not that I’m blaming anyone for our lack of savings, but it does make saving a bit more difficult. How can it not? Honestly, though, I think it comes down to a difference of opinion in the way life should be lived.

Somewhere Between Thrifty and Practical

By no means do I consider myself a frugal person. In fact, if we were rich, I would definitely want to be spoiled. Frugality is a state of mind that my brain can’t quite wrap itself around. It borderlines on penny-pinching, and I just can’t bring myself to do it. In other words, I don’t want to trip on pennies to get to retirement, but I’ll get fired up to fight for those dollars.

I don’t clip coupons, but I thrift shop or buy off the clearance racks. I buy whole and nutritious foods and cook at home. I trim the fat in our household bills, and I don’t think we’ll ever buy a new car again, but that doesn’t mean that I don’t want to experience life. It means that I also want to think ahead to an adventurous and relaxing future… and that takes A LOT of money.

It’s estimated that to enjoy retirement, you need like 2 million dollars in the bank. 2 million.

My Dad was a very generous man. When my eyes would bulge at the bill for a fancy dinner or when he surprised us with a big vacation, he would always smile, shrug and say “You can’t take it with you.”, and he was right. You can’t take it with you. You can save it, retire on it, vacation with it, or leave it to your loved ones, though. You know how they say you’re going to marry someone just like your Dad? “They” were right. I did.

A Heart of Gold with a Taste for It

Fortunately, and unfortunately, my husband is a millionaire in a middle-class man’s life. What I mean is that he works like a slave to make sure our needs are always met because he loves us to the moon and back. He even wants to lavish us in the things we want, whether we can afford them or not. He believes in true love, living in the moment, working hard, sharing experiences, good food (he considers this an experience all on it’s own), and shopping to your heart’s content. Sorry, ladies, he’s taken. 😉

He wants the best in life for all of us, bless his sweet heart, BUT so do I, and not just in the moment, but in a million moments we haven’t reached yet. What he refuses to accept is that I don’t need a new car, a big house, or fancy meals to make me happy.

I just want to secure our future, which will, in turn, allow a little “seed money” for our kids when we’re long gone. This is my dream… not jewelry or vacations.

Get Your Spendthrift to Be Thrifty-er

Thrifty is just not in their nature. It’s not about changing who they are, but working together to meet a goal that you set together. This will require many conversations about money to share what’s important to each of you. There will be many compromises, but I promise it will be worth it in the long-run. Here are some ideas on how you can work together to save money for your future, whether that’s an emergency or rainy day fund, college savings, or for your retirement:

• Compromise on the big things. If he/she wants to spend money on a big vacation, find a nice bed and breakfast in a town that’s within a day’s drive instead, and downgrade it to a weekend trip instead of a week-long trip. If it’s for the whole family, do the same, but with outdoor activities in mind.
• Thinking of a new car? Cater to his/her practical side with discussion on how less debt, low miles, and regular maintenance might be better for your financial outlook.
• Entice your spouse to stay home for dinner with a good home-cooked meal. There are thousands of recipes online that will cure that itch for going out, which is usually initiated by boredom or lack of food in the fridge.
• Bigger isn’t always better. A bigger house usually means more space to clean, more repairs, lawn maintenance, more space to heat and cool, and a lot more debt. Whether you’re renting or buying, talk about your family’s true needs in regards to housing before you jump in with both feet.
• Take your spouse shopping with you and show them how easy it is to find something they like on a sale rack or in the thrift shop. It’s always better to show and share than it is to tell.
• Cut the credit cards. Okay, maybe you don’t need to cut them just yet, but discuss some rules or boundaries that you both should stick to when, or if, you use them. And, make sure you know when one of you is charging something, so you can prepare to pay it off.
• Come up with a small saving plan that you both commit to on the spot. Talk about the pros and cons, then how you can be consistent and the amount per month works well with your finances. Then, agree to reassess your savings goals again in 6 months.

Talking about money doesn’t have to be difficult. I guarantee that your husband or wife is not opposed to saving money, although it may feel that way at times. Perhaps he/she just want to enjoy life and be in the here and now, and in most cases, that’s a good thing. Brainstorm and figure out how you can do both. Marriage requires a lot of things, especially compromise, so it’s important to talk about money concerns. That’s the only way you can both get in the same book, and on the same page.

Mistakes. Nobody wants to make them, but we do, and by the time we realize it was a mistake, it’s probably too late to do anything about it. And, financial mistakes are some of the worst, because they don’t just affect you. It involves your family, your current income, and your future savings.

I’m a 40-something woman with a family, and I consider myself to be somewhat intelligent in most things. By most things, I mean just about everything but politics, and finances. I didn’t know what I didn’t know about finances, saving money, and investing until very recently. And, I still don’t know a LOT about any of it, but I’ve put my best foot forward to learn as I go, so that’s what I’m doing. What else can I do?

Financial Mistakes are Embarrassing

I’m going to share what I consider to be mine and my husband’s biggest financial mistakes. There are many more than just these 5, but these were the most damaging to our life, and to our future  together. We very much regret the way we mishandled our money and are trying to get on track to set things straight, and get ahead. Every cell in my body knows that we’ll accomplish this lofty goal, but my patience will definitely be tested

I hope that by sharing our financial mistakes, we cause you to pause. Whether it’s to guide you away from certain things or makes you rethink a plan, then it’s worth my embarrassment. And, make no mistake, I am embarrassed. When your mother tells you to think things through, you really should take heed.

Purchasing the Wrong Home, then Remodeling

This was one big financial mistake, but we sure learned a lot. Hindsight is 20/20, right? Many years ago, we bought a beautiful home. Acreage, a huge garden, spacious and private. We had the money, but not much else. We were excited and in our 30s, which is pretty normal for first-time buyers…maybe even a little late.

The problem with this purchase was two-fold – we didn’t have a stable income and we wanted to “improve” the house. We went way over budget on the remodel and two years later, had to sell the house. We didn’t even break even, as the housing market crashed and we went in the hole due to the remodeling costs.

RETROSPECT: We should have waited, or at least shopped around more and purchased a smaller home that was more suited to our needs at the time.

Using Emergency Fund for Non-emergencies

We have become used to living a certain way, so because our income can have it’s ups and downs, financial stability can change quickly. When it was good, it was really good and we stocked some money away, but when it wasn’t, we went back to our savings to live on it. Now, some would say that’s what an emergency fund is for….to lean on. Unfortunately, we didn’t lean on it, we relied on it and emptied it.

In other words, we still went out to dinner, bought the kids new clothes, and traveled, even though we, technically, couldn’t afford to do any of those things. We didn’t trim the fat when it was required. There was nothing frugal about our thinking back then, and that prevented us from saving more for our future together. Although we regret our inability to curb our bad habits, we know better today, and we’re working on building better financial habits.

RETROSPECT: Obviously, if I could go back in time, I would have lowered our cost of living by way of rent and monthly bills in any way I could, ditched the fancy coffees, cooked more at home, and bargain shopped a lot more, among other things.

Living on Inheritance Money Instead of Investing

I am going to go out on a limb here and say that this was, bar none, the biggest money mistake we ever made. This could have been a financial turning point for us, but it wasn’t due, in part, to selfishness and guilt.

Have you ever felt like no matter how hard you worked, you could not afford to give your family what they needed or wanted? It feels awful. This is where we were mentally when a substantial (to us) inheritance came our way. Financially, we were hurting and not even making ends meet.

We talked about what to do with the money. Debt settlements were discussed, vacations, savings, business needs, housing, everything. We argued. We made lists. I so badly wanted to pay off debts, and he so badly wanted to spoil our children and do things to make us happy. We tried to do both, while catching up on just about everything, but within the year, the money was gone. We had squandered it away.

RETROSPECT: Of course, we should have been practical and caught up for the month, paid off ALL DEBTS, given ourselves enough for an emergency fund (and used it correctly), and then invested the rest long-term.

Using Credit Cards to Fund our Business & Life

We’re, regrettably, still paying for this mistake. We did what most people still do – used our credit cards to keep paying for things we couldn’t afford. That got us into a world of debt trouble. Double trouble, because we each had our own credit cards. We also had to keep our business afloat…with a credit card and a few lines of credit.

We were in deep, and although we’ve managed to pay off almost all of my debt over the years, the ones used for the business are still knocking at our door. Honestly, I’m not thrilled that we lost control of our spending with credit cards, which also hurt our credit scores, but I don’t regret using it to save our business… because it’s now thriving.

RETROSPECT: Credit cards carry a lot of risk and responsibility. This was a hard lesson and we haven’t hand any credit cards since. They can help AND hinder, and sometimes it’s hard to tell the difference. We should have left the personal credit cards out of the situation altogether and got a business loan instead. It would have been more economical in the long run.

Upgrading to New Cars Instead of Buying Used

Should we file this mistake under obsession? It’s so strange because we didn’t have a choice but to buy used cars starting out, but after our first new car, we just couldn’t stop. We kept upgrading before they were paid off, one loan after another. We lost so much in depreciation, it’s hard to talk about. On top of that, we were paying out in interest too. It was a lose-lose situation. Granted, we had a nice reliable car, but at what cost?

Yes, they were bright and shiny, and smelled heavenly. But lesson learned! We finally paid off our last new car recently, and man, were we pleased with ourselves! Yes, it’s a tad worn, but it runs like a champ and we love it. We will never buy a new car again. It’s just not worth it.

RETROSPECT: We probably could have saved tens of thousands of dollars over the years. We bought a LOT of new cars – easily 7 in 12 years! In the future, we will do our research and buy used. Pinky swear.

Is it really okay to make money mistakes?

Yes and no. Making mistakes is part of life, but if you’re making big ones like these, ones that can be prevented, then you’re doing you and your family a great disservice. And some of these mistakes can dramatically shape your future – whether it’s for the worse or not really depends on the size of the mistake and how well you rally.

Believe me, I know you can’t see every obstacle coming, but you can be smart, think ahead, and plan. Then, think again.

Saving money is already hard. Life is expensive and it’s tough to put anything aside for the unforeseeable future. Not only does it take discipline, but you also have to find that little bit of money that you wanted to save in the first place…and maybe you just can’t find it. Well, I have good news and bad news.

There are plenty of small ways to save, as we discussed in “Can’t Save Money or Won’t?”. And, the good news is that one of the ways to save mentioned in that post is absolutely free – it’s called Digit. The bad news is that you may not have heard of it until now, which means you’re not using it, which also means you’re not saving more money with it… yet.

But, you’re here now, thanks to this glorious thing we call the internet!

Digit is not an app or software program. I need to make sure you understand this because most everything else is, so it’s in our nature to assume it’s like everything else, but it isn’t. It’s based in texting (SMS), so although different, it’s extra-easy. You don’t need to download anything, and once you sign up for a Digit account and connect it to your bank account, you’re all set.

Being set up like this allows for simplicity. You don’t have to login and check account balances or tell it what to do. Digit already knows what to do and is going to keep you updated every step of the way. You have to trust this little (but very smart) system. For example, if you want to withdraw some money, then just text “withdraw”.  It will ask you how much, confirm it, and let you know what day to expect your deposit (usually one day later). Done.

If you want to pause Digit, text “pause”. It’s that simple. 

How does Digit save me money?

Digit analyzes your spending habits and finds money to save. I know it sounds strange, but it works! Digit uses an algorithm to decide how much money to take and when to take it from your bank account and put it in your Digit account. It will differ from one person’s account to another, but it’s saved in small increments every few days, so you’ll hardly notice it’s gone. If you find that it’s taking too little money, or too much, just text “save less” or “save more” to adjust it.

The best news? It’s all automated. After set up, there’s nothing to do but save money!
(Is it just me or are banks really missin’ the boat on this one? Auto-deposit isn’t enough.)

And, it updates you daily, weekly, or as often as you like, to let you know what’s going on and how much they were able to save for you. You can also access your account online, but it’s really not necessary, unless you want to view your savings history or have a question.

Security
I’m sure you’re immediately concerned about security, like I was, so you’ll be happy to know they provide bank-level security and your money is FDIC-insured. Oh, and no, they won’t overdraw your account – they actually guarantee it. If they ever do, they’ll pay the penalty for you. I guess they feel very strongly about that algorithm. 😉 

Rewards
Digit just announced Digit Plus, which allows rewards for those who keep their money in their Digit account rather than withdrawing it. By leaving it in there, you can earn $.05 for every $100 in your account, every three months. This is a very small incentive, but as we’ve discussed, every penny counts. I probably won’t leave my money in there because I know I can do better.

Here’s what I plan to do instead.

How I Use Digit to Fund Acorns

Since I want to save money so that I can invest money, which, in turn, will make me more money, I need a plan to get started. The problem is that I’ve really just started to save money, so I don’t have the minimums required for the larger investment companies, but, fortunately, I don’t need one for Acorns.

You lost me, Mrs. MoneyJar. What the hell is Acorns?

In simplest terms, Acorns is an app that connects to your bank accounts and rounds up your debit card transactions and invests the difference in a pre-packaged portfolio (for a small fee).

I opened up an Acorns account right before I found Digit, realizing that I really wanted to put at least $100 per month into Acorns (on top of the round-ups). This wasn’t possible because I was struggling to save enough to do that…until Digit.

I have only been using Digit for 7 weeks, so almost two months. That isn’t very long, but in that short time, I’ve magically saved $150! That’s just shy of what I want monthly for Acorns, but I can probably save a little more this month, so I know I’ll hit my monthly target. What’s crazy is how easy it was to save money with Digit – I hardly noticed it was gone from my checking account, and what this tells me is that I do have the money in there to save, but I couldn’t find it because I was probably mindlessly spending it on less important things.

I’m predicting that I’ll meet my $100 savings goal via Digit by the end of this month! So, each time I get my text from Digit announcing that I’ve reached my milestone of $100, I’ll withdraw it and put it in Acorns, because I’m a beginner investor and it gives me the opportunity to help my money grow a little bit.

In the meantime, get Digit-al and save more money, because this is gonna be big. 

If you say you can’t save any money at all, I’m going to immediately call bullshit. You only think you can’t save any money. I have been living paycheck to paycheck most of my life and I thought I couldn’t save any money either, but you know what? I can. I just have to get off my lazy ass, commit to myself, and actually do it. As it turns out, there are a few simple ways to get started.

In 5 Steps to Get Out of Financial Purgatory, I briefly mentioned how vital saving money is, but now we’re going to talk about the “how” part of saving. First, let me beat you to your excuses: I can’t afford to save. I don’t want to sacrifice having fun. I need every penny I can get my hands on. Get over yourself. I was delusional for years too, and am just now waking up. Yeah, at 40-something. I didn’t learn how to handle money in school, and my parents didn’t know enough about money themselves to teach us anything about using it, saving it, or building a massive empire out of it (it’s not like they were wealthy). They were broke and in debt, too.

So, I’m middle-aged, with financial regrets, and little to no savings, and it’s (finally) time to do something about it. I’m not helpless or stupid. I’m just out of excuses, realizing I don’t want to work until I die. I have lots that I want to do! Obviously, this epiphany occurring 20 years ago would have been more convenient, but there’s only one direction to go from here – forward.

Donald Trump has nothing on me. Just because I don’t make billions of dollars doesn’t mean I can’t save. Who says I have to start big? I can start anywhere, as long as I start somewhere, and I have some ideas I’ve recently implemented that you can start today.

Look Down to Save Up

Sometimes looking under your car seats, at the bottom of your purse or depths of your wallet are the best places to find your savings. We want to pay close attention to the little leftovers from recent purchases. Let me expand on that a little bit.

Skimming:  I don’t like to budget, so instead, I take a little off the top and stash it away each time I get paid and do what I want with the rest. In essence, I’m paying myself first. I’m making myself a priority, and it feels pretty damn good. So, if you get paid at the same time every week or month, set up an automatic transfer to your savings account. If you don’t, do it manually when your check comes in, or just pull out the cash and stash it somewhere safe (not in your sock drawer).

• I’m not putting my savings in a high-yield savings account for a reason. I believe they’re a waste of time, as rates are little more than worthless right now. Instead, I prefer to save  a small emergency fund, then invest a small amount and make some returns that way. I’ll show you how to “start small” in investing in some future posts, because even people like us (without significant net worth) can participate in investments.

Right now, I can swing saving about 5-8% of our income, but I strongly suggest choosing the largest percentage you think you can get away with, but if it starts at only 1%, that’s okay too. Start there and bump it up a percentage (or more) next month and the month after that. Consistency is what we’re after – good saving habits.

Money Jars:  Hi, I’m Mrs. MoneyJar… as in Money jar. I have two money jars in my office and my children each have one, plus their own checking and savings accounts. I have one 5-gallon “jar” for loose change and one very large (gallon) mason jar for tightly rolled $1 bills and $5 dollar bills. I put money in them at the end of every single day. If you’re not ready to drop your fives in there, then just start with the $1 jar and the change jar. You’ll be amazed how it builds up in a month!

Going Digital:  If having a money jar nearby is too tempting, then get digital with Digit (yes, it’s a referral link – because I use it, love it, and it works). Digit actually analyzes your checking account, and then decides when and how much to pull from your account based on your income and spending habits. They guarantee to never overdraw your account and you can control as much or as little savings as you like – you can even hit “pause” for a few days. And it’s kind of fun getting their text updates on what they saved you for the week!

It makes saving money so easy because it’s automated, secure, and free! And the weekly texts are fun and motivating. I don’t have to do anything, or even think about it, and I hardly notice when money is pulled out of my account. And, if I want to withdraw, I just send a text and get my money the next day. Seriously, you can’t go wrong with this if you have a phone with texting capabilities. It’s perfect. I talk more about Digit and it’s features here.

Small Savings = Big Future (eventually)

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki

These are three of the best ways I have found to get started saving in small ways without negatively affecting my day-to-day life. Doing these things (by the way, I’m doing all 3 right now) is helping me start a small savings. My current goal is to have an emergency fund of $2500 (to start) and $500 or more to invest. Your starting goal may be different than mine and that’s perfectly fine, but I urge you to start small, because it’s critical for your goal to be within easy reach so that you can succeed, then you can create a bigger goal.

Once I make my first goal, I’ll make it grow with small, simple investments (while still continuing to save). I’m learning that there are many ways to accomplish this, depending on the type of investment, amount of money invested, level of risk, and reinvestment. The idea is exciting, though, isn’t it? We’re going to grow money!

My parents always told me that money doesn’t grow on trees, but if we plant some seeds and make good decisions, maybe it can….

Cutting expenses is #2 on the list of 5 Things to Get Out of Financial Purgatory. And, I hate to be the bearer of bad news, but you’re bleeding. The question is, “How bad is it?”. If you’re passed out on the floor, get up, because we have a lot of work to do.

I’m not gonna lie, this step might make you a little uncomfortable, but it’s necessary. To get where you want to be will require some discomfort and sacrifice, but you’ll see that it can be adjusted to whatever level you decide is best for you or your family.

3 Ways to Jumpstart Your Savings

First, get a list of ALL of your monthly expenses. ALL OF THEM.

The expenses we’re going to discuss here will fall into 3 categories: household bills, memberships/subscriptions, and entertainment. Bills such as rent/mortgage, car payments, credit card bills, medical debts, student loans cannot be reduced using the following three methods – negotiation, downgrading, or elimination (at least not in the way that I’m talking about in the examples below).

NEGOTIATE these types of expenses: cable, internet, phone, bottled water cooler (can fit in any category), garbage, alarm/security, some medical (per visit). Negotiation cannot be used for state or county regulated household bills (gas, power, water, etc).

You can choose to negotiate these bills yourself or choose a company like Billcutterz to do it for you (at a cost of half of your savings). If you do it yourself, there are a few things to keep in mind:

• Be positive and friendly with whoever you speak to.
• Don’t whine, but be honest about your inability to pay your bills.
• Talk to someone who can actually help meet your needs (supervisor/manager)
• Inmost cases, the business wants to retain you as a customer, but you’re telling them that you can’t pay your bill in it’s entirety, so be prepared to put cancellation on the table.

We negotiate a cash discount of 15% for any medical expenses outside of our insurance coverage, like dental or chiropractor care. You don’t know what businesses are willing to budge a little until you ask, SO ASK.

Post in the comments below if you are looking to negotiate a specific account and lets talk about some tips and tools to keep in mind. Be sure to provide some details of your situation.

DOWNGRADE these types of expenses: cell phone package, gym membership (unless you need to eliminate this cost), property maintenance, car insurance, health insurance, pest control.

Downgrading is pretty self-explanatory. For example, we’ve always had a family gym membership, but we needed to cut corners. My husband works out all the time and I love to utilize the exercise classes, so it’s not something we want to eliminate. Instead, we downgraded it to a Select Membership, meaning we all still have access to all of the facilities, but we can only come in at a certain time on weekdays. This downgrade saved us $675 per year!

We also looked over our car insurance coverage to save money. We raised some of our deductibles, lowered rental reimbursement and property damage, removed roadside assistance (since we have AAA), and made sure we were utilizing all of our discounts. This downgrade saved us $312 per year!

And, downgrading our cable bill saved us $763 per year! I’d love to get rid of cable altogether, but my husband and I are on opposite ends of the spectrum on this one, so we had to compromise. For others, it may be feasible to cancel cable and and get an antennae or rely on something cheaper, like Netflix or Hulu for TV entertainment.

ELIMINATE these types of expenses: magazine/newspaper subscriptions, Netflix, Spotify, going out to eat, paid entertainment (movies, shows, theme parks, etc), coffee, clothes shopping, house cleaning

One of the first expenses we eliminated completely was our water cooler, and saved ourselves $900 annually. We purchased a $20 filtered water pitcher and a $10 tea kettle (for hot water) instead. We’re also skipping the coffeehouses. It’s bad for saving and bad for our health. Two birds with one stone.

Whatever you can do for yourself, DO. Clean your own house, mow your own lawn (borrow a mower from a neighbor or hire a local teenager to drag his over and do it for you cheap), do your own repairs, make your own coffee, and cook your own food (as often as you can). Give yourself haircuts at your own risk (my mom’s a retired stylist – chalk one up for Mrs. MoneyJar).

Second, subscriptions can really add up. Be VERY selective with the digital ones. And, for the love of Peter, Paul and Mary, get rid of your newspaper and magazine subscriptions! It IS the 21st century, so most are readily available online. If not, you can certainly get your paper fix by wandering into a bookstore, coffee hangout, library, or local waiting room, free of charge.

Third, stay out of the malls and retail shops. Shop used. This includes clothes, furniture, cars, etc. Bonus – you’ll feel like a superstar when you find the perfect thing on the cheap!

Lastly, going out to eat and paid entertainment is where people lose the most money. I’ll be the first to tell you that “date night” is of extreme importance to your relationship, especially if you have kids, but you can also spend that date doing something OTHER than going out for a movie or eating at a fancy restaurant. And, there are also cheap things to do with kids.

Using the above methods, we were able to save a total of over $2600 per year! Cha-ching! That savings is going to go towards debt, then (hopefully), trickle into our money jar.