Saving money was something I loved when I was younger but lost sight of in recent years.
I started “seriously” saving money when I was maybe 12 years old. My grandpa revealed he had about $1,000 in savings bonds for me that he had purchased when I was a baby, and I could cash them in if I wanted to. As a twelve-year-old, he might as well have said he was giving me a million dollars because I was completely convinced I had just become rich.
Maybe most kids would have wanted to spend that money on something awesome, but I didn't. Partly because he played the reverse psychology game like a pro, saying, “You could open a savings account and keep that money… but I am sure there is something you'd rather buy.” Buy?! Lose my fortune?! There was no way.
My grandpa and I (1991)
Opening my first savings account
We went to the bank and opened a savings account together. I was too young at the time to manage my own account so my grandpa signed on as my custodian. We deposited the money from my savings bonds and that was that. I was officially in love with saving money. From the fancy lobby to walking up to the counter and talking business, I felt like a totally made adult and I loved every second of it.
When holidays and birthdays would come around, I would put any cash I was gifted into my savings account. My grandpa also gave me a $25 *allowance* each month that I would deposit (he still does to this day!). Every month we would look at my statement and I would marvel at the balance, watching that number grow.
I wasn't just saving money to save, though. I was saving for a house. Even at twelve years old I knew that saving money wasn't saving money, it was working towards a goal. Growing up I always lived in a condo and after my parents got divorced, my brother and I hopped around a lot. I don't think I ever felt like I had my own home, and I knew once I was a *real* adult I wanted to buy my own house.
At sixteen, I got a job working as a hostess in a restaurant. I was paid about $3 an hour and was tipped out cash by the waiters each night (usually $40-$100). I made decent money but I was a teenager, so let me tell you — I had a lot of expenses: gas for my car, clothes for every occasion, Egg McMuffins before school and sushi buffets on the weekend. I practiced moderation at the time by spending my cash tips and saving my paychecks. I was only working about 20 hours a week so my paychecks were small but I usually deposited over $100 a month.
By the time I was twenty I had saved over $5,000.
Then life happened.
My grandpa and I (1998)
Temptation is real and real life is expensive
My dad's side of my family is from Spain and it was always my dream to go there. I decided I would do a study abroad program which would help me meet my language requirement in school and also allow me to fulfill my dream. My family was encouraging but weren't about to foot the bill. They were already paying for my school and said living in Spain wasn't included in that room and board package.
I remember feeling completely crushed and desperate. I had to go to Spain.
So I talked with my grandpa and we decided to empty my savings account so that I could go. He said encouraging things like, “It's your money” and “You can always start over.” Since I was spending the money on a study abroad program and not shoes or something frivolous, I guess he thought my decision was more responsible than reckless.
But part of me couldn't help mourning the loss of my dream house that was about to go from having a $5,000 down payment to a big, fat zero. Not to mention, that was eight years of savings. It was bittersweet but Spain it was, and at the time I believed my grandpa was right. I could always start over.
Looking back, I don't regret my decision. I didn't blow the money on more makeup and froyo, or the countless other things that I spent my money on in college. Going to Spain was a goal of mine, and although that money was being saved for a different goal, it still went somewhere pretty special.
Me in Cadiz, Spain (2008)
Did I ever start over?
Yes and no. I've ridden a similar roller coaster called “Saving and Spending Money” ever since. Historically, I'd go through periods of time where I would be really diligent about saving and then would drain my account for some kind of adult-related expense (or more usually, a trip of a lifetime).
Recently though, things have changed. My friend Dani (CFP™, ultimate Wealth Coach and fellow Invibed co-founder) has put personal finance back on my radar and I've started saving again with my twelve-year-old dream in mind: owning my own home.
Although my balance is smaller now than it was when I was 20, watching it grow is bringing back some familiar feelings. I really do love the feeling of saving money, and I think it's the kind of thing where you just don't get it until you do it. I promise once you get started, you're going to feel more in control and also have a better perspective in regards to your job. My grandpa always reminds me, “Pay yourself first,” and if you're not, it's only natural to feel like you're working for nothing.
Dani and I in New Orleans for her Bach with our college roomie Angela (2015)
Tips for saving money that really work
I've struggled with saving money as much as anyone, so when I say these things *really work*, I mean they've worked for me and I think they will work for you too.
- Start small. Saving money is mostly habitual. Once you start saving a couple dollars a day, or week, or month, it'll become routine and you won't think it's such a big deal. Don't be worried about the amount you can save, focus on the actual act of saving. Once you discover that you CAN save money, you will.
- Keep your money safe from momentary lapses in judgment. If you can automatically transfer money from your savings account to your checking account, it's likely that you will. I prefer having a savings account at a separate bank than my checking so I'm not as tempted to dip into it. Online banks are also awesome because they feel even farther away and offer better interest rates. Ally and Capital One are both good options.
- Have a goal. Listen to twelve-year-old me, okay?! You need motivation. Which is why savings goals are so important. You should have more conservative goals (like saving for an emergency) but it's also important to have fun goals (like going on a vacation). You might not be able to afford a $2,000 vacation today, but if you start saving $165 each month now, next year you will.
- Have a savings account for each one of those goals. If you are saving for separate things (such as that emergency fund and dream vacay), don't keep that money in the same account. Separate your savings into different accounts and name them accordingly.
- Regard extra money as money to save. Remember when I told you that when I was a hostess in high school I saved the money from my paychecks and spent my cash tips? My paychecks were almost an afterthought when I looked at how much money I was making. That was because I would get my paychecks just twice a month and tips were distributed the day after a shift. It was easy to save the money from my paychecks because it felt like “extra money”. Regard any “extra money” in your life (such as a raise or bonus, money earned from a side hustle, or cash gifts) as money to be saved, because you already know you can manage just fine without it.
Saving money can help you feel more secure, afford the more expensive things in life, and improve your relationship with working and money in general. What are your favorite ways to save and how have you overcome the obstacles that are trying to crush your goals?