1.07.2012

resolutions: wealth


as most of you know, steve and i are both college students, attempting to raise a rambunctious little boy. so our well of wealth isn't exactly overflowing. but our resolution for 2012 is to start building wealth. last year, we got ourselves completely out of debt, which feels amazing. our only debt now is our car payment, but we hope to have our car fully paid off within the next few months. we feel like we're finally in a position to start saving for our future. here's how we plan on doing it...


the ten percent rule. the easiest way to start saving. when you get your paycheck, automatically put ten percent into your savings account. we get paid weekly, so we estimated our average monthly income and just put ten percent away at the beginning of each month. most banks will do it for you automatically if you ask them to. what's nice about the ten percent rule is that once you make it a habit, you don't even think about it, and you don't miss the money. tight on cash? start with five percent. even if you only make five hundred dollars a month, saving five percent of that leaves you with three hundred dollars at the end of the year. it might not seem like much, but it's a whole lot better than zero.

the step-down principle. this has saved our bank account. before we had jude, steve and i ate out all the time. we were both living really busy lives as full-time students, and at one point, we were juggling five jobs between the two of us. i would get fast food on my lunch breaks all the time, and so would steve. and then we would go out to dinner because i got off work at midnight, and had no desire to whip up some baked ziti and then clean it all up. the nights we weren't working, we would still go out to eat, because we felt like we finally had free time, and we should do something special. so we started using the step-down principle. basically, we would say, "hey, it's friday, let's go eat at cafe sabor, and then go see a movie" ($45). then we'd go, "okay, maybe cafe sabor, and we'll see a movie at the cheap theater" ($33). "or maybe we'll just eat at costa vida and get a movie from redbox" ($16). "you know what, we'll just make tacos at home, and then go get a movie from redbox." ($1). i'm not saying you and your spouse should never go out and treat yourselves. but most of the time, there are always more affordable options. and cooking together always beats sitting in a crowded restaurant with an obnoxious waitress, and dozens of students on awkward first dates.

cash stash. we really need/want a new laptop, a nicer camera, a couple of bookshelves, and want to save up for a road trip this summer. for purchases like these, we decided to start putting away actual cash to save for them. i can never justify a big purchase even if it's something i know we need (and even if we have the money for it)! i just want to hold onto any excess cash we have. it eases my mind a bit if i can withdraw twenty bucks here and there and let it add up slowly. that way when we do go camera shopping, i'm not thinking, "do you know how many diapers this would buy me?!" i can spend the money on a camera, because i know that's what the money was for.



so, there you have it. three easy ways to start saving. i know this is pretty basic, but it's a great starting point (it was/is for me, anyway). SO! have any financial goals for 2012? any money-saving tips? i'd love to hear them!

6 comments:

Sara said...

I'd love to hear them too! :P The step-down principle is really good, except a lot of times I feel like we eat at home anyway, so we don't have much to step down from. haha. I do like the cash idea, that way you have the money ready to be spent on what it was intended for.

Sara said...

Whoops! I forgot to check the box for follow up comments, I want to read them all! :)

Tyler said...

tithing. it works.

Ruth said...

Since I stopped working, about a year ago, Matt and I have really had to try hard to live within our means.
I think the best thing I did was make a budget. We bank with USAA which is awesome because they have a budget tool that pretty much does all the work for you. Being able to see how much money we're bringing in and how much we're spending, and what we're spending it on every month is really helpful.
Pretty much the only thing I spend money on is groceries, so I'm always trying to do what I can there to save money, whether it's looking at the weekly circular so I know what's on sale, to buying the store brand, to using coupons.
I also agree with Tyler's comment. We've always had money for our needs and we truly believe it's a blessing from paying our tithing.

elise said...

amen, tyler and ruth. interesting tidbit...did you know that if every person paid a tithe of 10% of all of their income to their church (no matter what church it is), it would completely eliminate the need for social security AND medicare in the united states? something to think about...

Meesh said...

Brett and I made some financial goals for the New Year as well. We use mint.com to track all of our finances, and it has a fantastic tool for goal setting. It links up directly to your bank account, and divides all your spending into categories like "food", "auto", "clothes", etc (you can edit these into categories of your choosing as well). The site will show you how much your spending in each category, percentages of spending in each category, and where your spending is in comparison with your goals. It's totally free and SO easy to use! I realize I sound like a commercial, but it has really helped us to get organized.