Let’s talk about money.
(Insert awkward silence because although everyone needs/wants to have money, few of us feel comfortable talking about it.)
I’ll be the first to admit we’re not financially savvy. We’re not great at sticking to a strict budget. But we do want our children to understand the value of a dollar. Hard work to earn money is important, but mindful spending is just as much so.
That’s why our kids know that this June we’ll be observing a spending fast.
June is a Three Paycheck Month for us. In the past, we’ve taken those as an opportunity to save a few dollars. That third paycheck is always a little bigger because the only deductions are taxes; insurance etc. is divided between the first two only. We’ve tried to treat it like a bonus: extra money that we didn’t budget for and are grateful to have.
Best of all, we use it as an opportunity to implement more mindful money habits.
Our spending fast strategy:
- Pay our tithes and other offerings first. (You can learn more about that here.)
- Spend money only on necessary things. Bills, gas, groceries…the basics.
- Put the money we would’ve spent on “extras” toward paying off debt or into savings.
- Be mindful of any exceptions we make.
That last one is important. Plans and circumstances change. We adapt as needed.
The point isn’t to avoid spending money completely but to be more aware of how we do it. Money is a tool, and like any other tool it is most effective when it’s not used haphazardly. Rather than self-indulgent impulse buys, we’ll only make carefully considered ones. Last time I talked about a spending fast, I put it this way: any “cheat” has been something that is “good for our bodies or our livelihood or our relationships.”
A spending fast always requires more planning than usual, and much more self-control. Both of those things are good for us, though, even if they aren’t always fun.
Kind of like having a savings plan. Really good idea. Not much fun. Which is why I didn’t put much effort into it for far too long. We’ve got a good system now, though, which is pretty simple and straightforward.
Our current savings plan:
- Transfer x amount from checking to savings once a week.
- Don’t touch that money.
That’s it. I feel like kind of an idiot for not doing it sooner than I did.
See, a while back, a Facebook friend posted a picture of a weekly savings plan that she was excited to try. The premise was simple enough. On the first week of the new year, you save $1. Week two, you save $2; week three, $3; and so forth. By the end of a year you’d have set aside nearly $1400 with minimal effort.
Something clicked for me when I looked at that chart. Only a dollar or two a week? We could definitely save more money than that. Why not skip the smaller amounts and go straight to the $52 at the end?
I set up an automatic transfer through our bank that very day. Surprisingly, we didn’t even notice a difference in the money available to us each week. So I increased the amount that was transferred every Friday. We adapted quickly. Again I increased the transfer amount. And so on until we found a number that allowed us to still take care of our monthly expenses comfortably while slowly filling our savings account.
It’s been fun to watch the balance grow.
Much as I’d love to throw more money at it, we’ve decided we would rather pay off our few remaining debts faster instead. After knocking out everything else, we are down to only a student loan (almost done!), a car payment (dang minivan), and our mortgage. In fact, we’ve been paying down the student loan aggressively enough that our statement always says we owe $0 that month.
(I see you, Department of Education, trying to collect all the interest and I’m not playing your little game.)
We could finish off the two small loans faster if we pressed pause on our savings plan…but we don’t want to. It’s so reassuring to watch that amount grow slowly but steadily, knowing that if we had an emergency we’d be much more likely to be able to pay for it.
And that takes me back to the spending fast. With the money we don’t spend in June, we hope to make a bigger dent in those debts, which will then let us put more into savings each week.
One of these days we’ll get into more complicated things like investments and whatnot. The thought of it overwhelms me; I know virtually nothing about that kind of thing. But for now, the occasional spending fast and our ongoing savings plan help us feel more secure and responsible about our finances.
Money’s a touchy subject, but I’m so interested in how other people manage theirs. Do you have a savings plan? A strict budget? What’s your money management style?