Our more recent podcasts have been kind of heavy on facts and figures. But let’s face it, we’re human, real people. I know what a healthy diet and lifestyle is, but what I’d REALLY like to do is wake up at noon and eat ice cream for the rest of the day. Managing our finances can feel that way too. So today we’ll talk about ways to set up your financial life so that you can make progress on your financial goals even when you don't feel like it.
The first step is daydreaming. Ask yourself, if I could have anything, time and money are no object, what would my ideal day be like? What would I do? Who would I do it with? From the moment you woke up till the end of the day, think it through and write it down. Then ask yourself, if I could have anything, but not everything, what would my day be like? What made the cut?
Naming what is important to you is the next step. Let’s go back to your happy day and give your wants and dreams names that mean something to you. It’s not a mortgage, maybe it’s your Home Sweet Home, or the cabin? Travel, meh. How about you name favorite beach, Disney, or Yellowstone? Retirement, really? Maybe you dream of the 9th Hole, breakfast in bed. You name it. Even your Emergency fund could probably have a better name, like safety net or soft landing. What do you want to be working and saving for? Bring up that vision in your head and give it a name that means something to you. The whole idea is that you work and save FOR something, not just because you have to or you should. Don’t get me wrong, maybe you need to or you should do something. But if you are working hard and saving, make it for something you can name and dream about.
Next step, start making it happen. One trick lots of people use, and I do myself, is to have separate pots of money for things. Let’s say you want a weekend away. Remember it’s not just a vacation. Name it. Dreaming of Nashville? Then get a jar or container and label it. Nashville, or Grand Ole Opry. Girlfriend Suzie lives there? Maybe your jar says Suzie Time. Put it in plain sight and each day before bed, put our leftover change in it. Thinking of Nashville? Give the jar a little shake. Remember your why. You can even count it out and see how much closer you are to your Nashville getaway.
Thinking, that’s quaint? Who even carries cash any more? You can do this electronically, too. Check with your bank about setting up multiple savings accounts. Many banks, including USAA and Navy Fed for our military, and online savings banks, do allow you to have multiple accounts and give them nick names. You can name your different accounts and transfer money from your direct deposit account, to the savings accounts. Usually you can even do this with a phone app. Starting small? Try transferring a few dollars every couple days. What’s even easier than the electronic “loose change goes in the jar” method? Automatic savings. Once you’ve named your accounts, you can make transfers from your paycheck to your special accounts. For example, USAA Bank has Savings Booster in their phone app. You can have $1 to $9 automatically transferred to a savings account 2 to 4 times a week. You can also set up automatic transfers to a savings account when regular deposits, like your pay, show up in your checking account. Ask your bank what savings programs they offer.
What’s great is you can check your balances online or in your app and see Suzie or the Cabin growing closer and closer to reality. Set milestones along the way. When you reach one give yourself a pat on the back, have a little mini-celebration. Just don’t rob the piggy bank to celebrate! For most of us, if we set money aside in a special place for something we can really see in our mind, we don’t miss that money as much. We get used to living day-to-day on what is left in the checking account. We make it work. And when we start to feel a little pain, then can give the jar a shake and dream.
