I’m going to say this as kindly as possible: Just because you make X (insert take-home pay for X) does NOT mean you should spend all of X.
If the pandemic has served any purpose in terms of what we should learn from it, it’s that we need to have our finances in order because the government cannot continue to bail everyone out of the financial situation they’re in (while $3200/person was a start at assisting, it does not begin to touch the debt loads some have or even cover the household expenses of some families on a monthly basis).
As one of my money mentors, Warren Buffett, has said, “Do not save what is left after spending; instead, spend what is left after saving.”
I know, this is easier said than done, but it can be done.
“I can’t afford to save” – that’s the common rebuttal.
No one is saying that you can afford to right this second.
But here’s a thought: Can you afford NOT to save?
Future you with life experience is hopefully whispering in your ear, “Listen to her, dang it, she’s right.”
If there’s one thing I hope I can help you realize, it’s that you can slowly but surely make the changes necessary towards making future you proud by making a mental mindset shift & doing the hard work now so that future you is not racking up 20%+ interest when you have to charge a true emergency on a credit card because the government isn’t there to send out a perfectly timed stimulus check.
How to start?
Start with minimizing the optional expenses & being savvy with the essential ones. Shift your mindset to living on less than you bring home so that when you’re hit with a car or home repair, medical bill, or unpaid furlough, it’s an inconvenience instead of an ulcer-inducing stress period of not knowing what you’re going to do other than charge it on a high rate CC/payment plan that may or may not incur interest.
Let’s all work towards increasing the savings rate in this country & end the statistic of 40% of Americans having less than $400 in emergency savings.
This week: look at your spending and bills for the last few months & see what you can reduce spending on to shift to savings instead. Also, review your essential expenses & determine what is needed in savings to cover just those expenses.
