Often, when I consider our budget, I resent that it's there. It annoys me when I think about the money in the savings account that I can't use for the things I'd like to use it on. The discussions about money chafe at me. I know we have a limited income and can't spend freely. Pretty much everyone is limited by the amount of money they're making, whether that's 100,000 per year or only 20,000 per year. I'm not alone in struggling with this. And I know the decision to live on a cash economy (no credit, no loans beyond student loans) was made jointly. But I still am unhappy having an allowance for personal spending and needing to stick strictly to the budget to build the savings account. Does anyone have trouble with this? How do you work to change your feelings and be more willing about budgeting?
Saving only to have money in the bank account sometimes isn't motivation enough to keep you saving. Those who find saving easier and always try to save more have targets they want to hit. There are for example some people who want to save enough money in order to start a business. That goal will keep driving them forward until they get what they want. I believe that to change your attitudes towards saving money you need to strip everything away and look at the bare facts. Why are you saving money? Write down the reasons and each time you feel budgeting is an unnecessary burden take a look at your list [ of reasons why you must save money] and maybe this would dispel negative thoughts.
I agree with Denis, it's always easier to save when you have a goal in mind. What I find helpful is to set up a goal for myself to save up. I usually set it to something ridiculously high, but possible, for me to meet but then promise myself a reward when I get there. For example, right now my goal is to save $2500 of my income when I expect to be getting $2650. That's about 3 months income, not including what I need to pay for bills. And when I get there, I'm going to buy myself something for my computer! I haven't decided what yet, either a new graphics card or a solid state drive, but just having the goal helps. Instead of thinking of the budget I have and what little I'm able to spend, I throw my budget into savings with the promise of a reward. But I'm a bit of an oddity. I really enjoy saving money, and I don't really like spending it unless I have a gift card. I also find that it helps not to look at my savings. My savings account is untouched money. I have no way of directly getting money out since I have no checks or anything for it. I would have to either try to find one of the banks or transfer it online (which takes 1-2 weeks). I basically void it's existence out of my mind. Of course I don't forget it and I still transfer money into it, but... well it's hard to explain. I treat it like "fake" money. It's as if you borrowed your friend's lawn mower. You know if you need it, it's there, but you don't really treat it as your own. It just sits there until you really need it. That's how I treat my savings account. Another thing that could help is calculating out how much money you need for each year of retirement. Then any time you want to buy something, calculate out how many days/weeks/months/years you could retire early if you didn't use that money. I haven't gotten to the point of needing to do that, but I feel like that would really motivate me not to spend it. Also, have you tried doing any additional work online? I find managing on a budget to be much easier if you're able to earn even a few dollars more to have to yourself if and when you feel like it. Right now I'm earning enough to pay for my phone + internet + food strictly on online earned money, and anything past that is free game for whatever I want. I usually splurge on some sausages and bacon after my bills are paid.
All of the advice above so far is great! Here are a few more suggestions. Stop thinking of your spending money as an "allowance." Thinking about it like that puts you in the wrong frame of mind and makes you resentful right off the bat. It's your extra money to use the way you want, which could include saving some of it for a couple weeks for a splurge on something larger. Also, is there a way you could maybe squeeze an extra $10 per pay period out of the budget for both of you to do something fun together? Even if it's going to an ice cream parlor, or a coffee shop. If you don't include any sort of fun or reward in the budget, it is far more likely to fail completely and for resentment to grow. You might not have a clear goal in mind for your savings either. You may have an emergency savings, or saving for retirement, which doesn't really have an "end goal." You need a clear perspective of what it would be like without that when you needed it. Think about all the things you would have to give up if you didn't have that savings when you needed it. Maybe go do some volunteer work at a soup kitchen, or with the elderly at a nursing home. If it's a retirement savings start a dream board, a big piece of cardboard that you put inspirational things on (pictures, quotes, etc) to give yourself something to look forward to during retirement.
I agree with all of the above! But I wanted to add that, as well as short-term goals you should be looking at not just long-term goals, but also long-term planning. Will you ALWAYS be stuck with a limited income? Maybe you can spend a little more now if you project that in the future you will be earning more. I mean you should always set aside money for a rainy day - including you or your partner losing your job, but if you are saving up for retirement (and you should), have you sat down and figured out how much you need to be saving over your lifetime, and if your income is limited now and you expect it to grow, how much you should contributing now as opposed to later? It could be at the end of that you are contributing as much as you need to contribute, but at least you will know why you are saving and seen the calculations. Another thing is that I save money into different 'funds' (on a spreadsheet, not my bank account!) so for example I'm slotting money into my electronics fund every month, so I can see it grow and there's excitement and now satisfaction when I can see that I can almost afford to buy a new mid-range computer (needed desperately)!
I think 'limited' is a relative concept. Our income is okay but knowing that a full half of it is going into savings sometimes makes me a little cranky. The goal is to be able to take several years off of work when my daughter is in college to travel. We'll be in our early 40's then. My grandparents took retirement at 60 and enjoyed a decade and a half of travel before they became too old but they traveled like retired people. I want to climb mountains and go kayaking and stuff. And if we keep this up, we should be able to do that (as long as we don't have a late-life baby but that's pretty unlikely) but it just feels really far away sometimes. The reward is about 5 years distant and we've been stuck under a tight budget to make it happen for 3 years already. Thanks for the tips though. I think some of them will be helpful as I try to re-frame it to myself again. It is/will be worth it eventually. It's just sometimes hard now, you know?
How to change one's attitude towards savings and budgeting? A very good question to ask, but you know.. everyone of us is living the kind of lifestyle we want with what we have.. so sometimes, it is not easy to "just" change the attitude towards savings... forcefully. Many of use makes it a resolution.. but just like smoking habit, it is difficult to achieve.. specially for someone who would say, I DO NOT HAVE ENOUGH!!!. Ok, but let us do something about it.. DO NOT CHANGE.. THINK that nobody is forcing you to change your attitude towards savings and budgeting.. BUT you have to RECORD your daily expenses and have a look at the summary of it at the end of the month. When you see how much you spent eating at the fastfood restaurant than prepare home cooked foods, When you see how much you spent on each cup of starbucks coffee you take every morning, when you see how much you spent on BUYING items you DO NOT NEED, when you see where you money is really going.. then, without anyone asking you... I am sure, YOU WILL CHANGE YOUR ATTITUDE towards SAVINGS.
Most experts advise very strictly on putting 10% of your gross income directly into savings. A full HALF? That sounds great, however, if you are so cranky about it, consider lightening it up a bit. You're starting to sound a bit like Silas Marner. Here's my approach to money in general: money is a tool. It's value is measured in the quality of life it affords me. This means that yes, I look at the big picture, because I'd like to have a moderately high quality of life until I die, but it also means that I'm not going to be miserable right now, waiting for the "good times" to start. Be realistic. Find a balance that you can live with NOW and later. And honestly, though I'm not cheap about a lot of things, I really do have a pretty keen eye for areas of my life that are WORTH high prices and those that can be bought very cheaply and still be as good. You never know what tomorrow holds. Hoarding things is frivolous to me. But I think there is also a level of financial responsibility that can be achieved without sacrificing your current peace of mind.
I don't have long term or short term goals to be able to save money. For me, saving money means you have to differentiate between the WANTS and NEEDS. I only buy things that are really necessary and most important to me. The WANTS are those things that you like to have but it is actually not a necessity. When it comes to saving, I do it the old and traditional way... the piggy savings bank, lol!! Everyday, I see to it that I put any amount in my piggy bank which will be opened at the end of the year.
A vehicle you can use to save money is a life insurance policy it can be a small whole life policy to will have the money out of site, you can pay on it for a certain period of time and then cash it out. You can get a good interest rate while you are building up your cash, just suggestion to help you with your goals.
This is interesting. But I think, this scheme will only work if you have a long term plan. I think insurance policies have certain regulations on cashing out the money only after it mature at a certain period. You have to read your insurance policies over and over and over again before you get one.... and only to cash it out at a later date.
