2844: Best Strategy To Successfully Start A Savings Account Or Emergency Fund by Andrea Joy on Money Habits

[00:00:00] [SPEAKER_00]: This is Optimal Finance Daily. Best Strategy To Successfully Start A Savings Account Or Emergency

[00:00:07] [SPEAKER_00]: Fund by Andrea Joy of savingjoyfully.com. And I'm your host and personal finance enthusiast,

[00:00:14] [SPEAKER_00]: Diania Merriam. This is the show where I read to you and to myself frankly from some of

[00:00:19] [SPEAKER_00]: the best personal finance blogs on the planet every single day. For now let's get right

[00:00:25] [SPEAKER_00]: to today's post as we optimize your life. Best Strategy To Successfully Start A Savings

[00:00:35] [SPEAKER_00]: Account Or Emergency Fund by Andrea Joy of savingjoyfully.com.

[00:00:41] [SPEAKER_00]: For many years I struggled to build a savings account. I always thought that I just didn't

[00:00:45] [SPEAKER_00]: have enough money. I was right and yet I was very wrong. You see, saving money requires

[00:00:52] [SPEAKER_00]: having money but it also requires discipline with the money that you do have. For years

[00:00:57] [SPEAKER_00]: I've lived paycheck to paycheck barely getting by. Many years spent trying so hard just to

[00:01:02] [SPEAKER_00]: pay down debt while simply paying basic living expenses. My husband and I both had decent

[00:01:07] [SPEAKER_00]: paying jobs and yet for some reason saving money never seemed possible. What I discovered

[00:01:13] [SPEAKER_00]: about why I could not save money. My strategies always seemed to fail and I would end up

[00:01:19] [SPEAKER_00]: right back where I had started. Why could I never save money? I believe it's because

[00:01:24] [SPEAKER_00]: I always saw it as impossible. I never broke it down to see that small changes over long

[00:01:30] [SPEAKER_00]: periods are more important. If you think of this in terms of weight loss, which the concept

[00:01:35] [SPEAKER_00]: is very similar, small lifestyle and diet changes leading to one pound a week after

[00:01:41] [SPEAKER_00]: a full year would be 52 pounds. That weight loss is life changing. Small financial choices

[00:01:48] [SPEAKER_00]: and changes in your budget can bring about similar results. A money saving challenge

[00:01:53] [SPEAKER_00]: that helped change my finances. About four years ago something changed when a coworker

[00:01:59] [SPEAKER_00]: mentioned a money saving challenge she was working on. There's nothing magical about

[00:02:03] [SPEAKER_00]: this challenge. In fact, it still required me to save money and avoid spending it.

[00:02:08] [SPEAKER_00]: The challenge started very small in the beginning and became almost like a game for me.

[00:02:13] [SPEAKER_00]: You start as low as a dollar a week and build slowly on that throughout the year.

[00:02:18] [SPEAKER_00]: This was the first time I found something that worked for me because it caused me

[00:02:22] [SPEAKER_00]: to commit to consistently save and allowed me to watch it grow without hurting my budget.

[00:02:28] [SPEAKER_00]: I was amazed that as the year progressed, I wanted to save more. I realized that I no

[00:02:33] [SPEAKER_00]: longer wanted to touch the money I had worked so hard to build up. I was proud of what I

[00:02:38] [SPEAKER_00]: had saved and I liked the feeling of security that came with having that money just in case.

[00:02:43] [SPEAKER_00]: So why did this money saving challenge work for me?

[00:02:47] [SPEAKER_00]: Number one, I found the savings challenge fun and easy.

[00:02:52] [SPEAKER_00]: Number two, saving money no longer hurt when I started with a small amount.

[00:02:57] [SPEAKER_00]: Number three, I finally saw how a savings account or emergency fund could benefit me.

[00:03:02] [SPEAKER_00]: Number four, after a little while I started hating to see the money go down in my savings

[00:03:07] [SPEAKER_00]: account. This made me no longer want to spend it on anything. Number five,

[00:03:12] [SPEAKER_00]: from the very first year this savings came in handy as a cushion to get me through to the

[00:03:17] [SPEAKER_00]: next paycheck. If money was a bit tight from one paycheck to another, I could borrow from this

[00:03:22] [SPEAKER_00]: money instead of using a credit card or a crewing fees at the bank due to a dreaded overdraft.

[00:03:29] [SPEAKER_00]: Why I highly recommend using a money saving challenge? Starting this savings plan and

[00:03:35] [SPEAKER_00]: continuing it was the best thing that I've ever done for myself. With the 52 week

[00:03:40] [SPEAKER_00]: money challenge, the result each year is $1,378 at the end of that year.

[00:03:47] [SPEAKER_00]: My husband and I did have to dip into my savings account a few times since I started my emergency

[00:03:52] [SPEAKER_00]: fund. This past year we had to purchase a new vehicle when our old vehicle became too costly

[00:03:57] [SPEAKER_00]: to repair. We used a portion to pay for a down payment on that vehicle. It was a blessing

[00:04:03] [SPEAKER_00]: in this situation to have some money to make a down payment to help keep the costs more

[00:04:07] [SPEAKER_00]: affordable. What starting an emergency fund has taught me? What I've learned through this

[00:04:14] [SPEAKER_00]: experience and from starting my first emergency fund is this, a savings account or emergency

[00:04:19] [SPEAKER_00]: fund is not only necessary but it sets you free in many ways. When you have some savings built

[00:04:25] [SPEAKER_00]: up you're no longer a slave to debt. Not having to use a credit card towards unexpected

[00:04:31] [SPEAKER_00]: expenses is such a great feeling. My final thoughts. I know saving money is hard especially

[00:04:38] [SPEAKER_00]: when you already feel so burdened by debt. However, if you're wanting to make a difference in your

[00:04:43] [SPEAKER_00]: financial situation you need to do something different for a change. Give a money saving

[00:04:48] [SPEAKER_00]: challenge a try starting this week. Two incredibly important steps in getting out of

[00:04:53] [SPEAKER_00]: debt are beginning your emergency fund and starting a budget. You just listened to the

[00:05:02] [SPEAKER_00]: post titled best strategy to successfully start a savings account or emergency fund

[00:05:07] [SPEAKER_00]: by Andrea Joy of savingjoyfully.com and I'll be right back with my commentary.

[00:05:12] [SPEAKER_00]: The key to build the habit of saving for me was a deep mindset shift. I had to reorient myself

[00:05:20] [SPEAKER_00]: to understand the value of saving and prioritize it over spending. Saving for a rainy day might

[00:05:27] [SPEAKER_00]: not be all that exciting at first but over time money in the bank offers a sense of security.

[00:05:33] [SPEAKER_00]: It's a great feeling to know that if life throws something unexpected your way you'll be able

[00:05:38] [SPEAKER_00]: to handle it without digging yourself further into debt. When you're first starting out

[00:05:42] [SPEAKER_00]: it's helpful to have something specific that you're saving for. This can help keep your

[00:05:47] [SPEAKER_00]: eye on the prize and provide a reward for the habit of saving which hopefully will help solidify

[00:05:52] [SPEAKER_00]: that habit. Over time saving just becomes something you do and you won't have to think about it as much

[00:05:59] [SPEAKER_00]: it becomes your default. I also appreciate the reminder in this article that baby steps are far

[00:06:06] [SPEAKER_00]: superior to big leaps when it comes to saving. If you continue to put it off for when you have

[00:06:12] [SPEAKER_00]: more money to save you may be putting off building this habit indefinitely. There needs

[00:06:17] [SPEAKER_00]: to be a sense of urgency around this pay yourself first habit with small amounts of money so that

[00:06:23] [SPEAKER_00]: as your income increases you carry that habit with you. Something I came across recently that I wish

[00:06:30] [SPEAKER_00]: I would have done for savings and debt reduction are trackers that you actually color in slowly

[00:06:36] [SPEAKER_00]: over time. There are tons of free templates online that you can print and display somewhere

[00:06:41] [SPEAKER_00]: prominent. Just google savings coloring chart. You pick a goal and as you slowly chip away at that goal

[00:06:48] [SPEAKER_00]: you color in the various milestones or progress. Actually seeing your progress outside of an excel

[00:06:55] [SPEAKER_00]: spreadsheet or bank statement is a great way to stay motivated. And that's a wrap for another

[00:07:01] [SPEAKER_00]: Monday show. Have a great rest of your day and start here week and I'll be back tomorrow

[00:07:05] [SPEAKER_00]: where Optimal Life awaits.