 | Q: I have tried before to have a savings account, but it never seems to work. Got any tips?
A: Yes. I think there are 6 main obstacles that stand in our way. We need to identify them and overcome them!
1. NEED. Most people simply do not see the need of having a savings account for emergencies. The reason? We depend on credit cards to bail us out each time there is a special need or crisis. We can and must choose to change our attitude and begin to rely on ourselves instead of credit to bail us out. So, don't allow credit cards to be used as your "psuedo savings account"!
2. TIMING. The average person will try to save from the amount he has "left over" at the end of the month. This will never work because we never have anything left over, do we? To set aside money for savings you must "pay youself first", that is, we must look at this savings contribution as a "have to" bill instead of a "want to" bill. If necessary, something else must be cut so we can have money to save.
3. AMOUNT. Another obstacle is that many try to save too much too quickly and fail in their attempt. They then get discouraged and quit. Start with a realistic goal; say building to $500 in your savings account. I know this is not enough, but it is $500 more than most of us have! Determine to pay yourself $50 a month until you reach this goal in 10 months.
4. METHOD. The best method Iis to have our savings contribution taken directly out of our check and deposited into a savings account. What we don't see, we don't spend. This allows us to save consistently without requiring as much self discipline.
5. LOCATION. I think it is best to have your savings account in a location where it is not so accessible, maybe even in a different bank or credit union that the one you use for checking. If it is an inconvenience to get money from your savings account, it might stay in there a bit longer.
6. DRAINAGE. Many people have told me than just when they are getting their savings account built up, something happens to drain it. Don't let this discourage you. At least the money was there this time and you did not have to borrow to meet the need. It would be nice if the need did not drain all the money, but if it does, it does. Just keep on doing the right thing and it will get built back up.
Most of the ability to save is a matter of perspective, and you and I have the power to change our perspective if we will choose to do so. As in most of life, our perspective determines our practice!
So, think about these obstacles I have identified and determine to overcome them! Set a goal of $500 in your savings account, then a month's income, then two months, then three. It is really that important. If you will start realistically and follow these tips you can do it! And in doing it, you will find tremendous freedom and pride in being prepared for the emergencies that life throws at you.
Copyright © 2004. Jim Garnett
The above information should be understood to be a general discussion of the subject matter and DOES NOT constitute a legal opinion about the situation. For further information please consult a qualified attorney.
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