Roadblocks to Saving: Not Planning Ahead

By on Nov 7, 2013 in Automatic Saving, Guest Post, Money Management, Personal Finance, Saving, Tips | 6 comments

 How to Save for a House, Car, Retirement, or Wedding

Welcome to our new guest contributor, Alexandra from Real Simple Finances. Enjoy Part 2 of the Roadblocks to Saving Series

Part 1 – Roadblocks to Saving: Not Treating Yourself (Sometimes)

Part 2 – Roadblocks to Saving Series; Not Planning Ahead

If you’re reading this blog, you probably already have a budget, or are trying to learn how to manage your money better. After all, what’s better than knowing exactly how much money you’ll have leftover to spend on yourself after all the bills are paid?

Now, if you just smiled and nodded in agreement, we need to talk. What’s left over every month isn’t for you to spend! I was in the same frame of mind at the end of 2012. What I decided to do changed the way I think about finances, and it changed my life.

In addition to factoring in non-traditional side hustle ideas like selling a service on Fiverr, I decided to plan how much money I would save. The results were shocking.

I’m going to share some of my findings with you today, in the hopes that you can also start planning your savings methods! And, the methods of saving are the same for a house, a car, retirement, or a wedding!

plan savings for house, car, christmas, emergencies

Save for pet emergencies too!

1. I opened a Holiday Club account at my bank.

My husband and I decided to set aside $20 a week for our Christmas gifts. At the end of the year, we have way more than we need — $1,040 to be exact. Our plan is to use some of it for Christmas, and to allow the remainder to be used for birthday gifts throughout the year. This planned saving protects us from overspending over the holiday, and eliminates January buyer’s remorse.

2. If you have animals, don’t forget to consider their emergency needs.

My dogs are a part of my family. Not having money to cover an emergency procedure is unthinkable to me. We save $20 per week for the dogs, or $10 per animal. We do not use this money to buy dog food or to pay for routine vet visits. This is, quite simply, an emergency fund for our dogs.

3. We analyzed our savings needs, and planned our emergency fund from there.

How much money do you need to save to have 1 month of expenses saved? 6 months? A year? When do you want to have that emergency account fully funded? These are all questions you need to ask yourself when planning how to go about saving.

Let’s do some math for a minute: Let’s say your goal for an emergency fund is $5,000. You want to have that saved up within a year. By dividing 5000 by 12, you realize you have to save about $417 per month to reach your goal. You could also divide your $5000 goal by 52, and you will see you have to save $96.15 per week to reach your goal. I’ve already reached my emergency fund goal, so I aim to contribute $50 each week to keep up the forward momentum while I focus on other debt.

4. I’m thinking about a new (to me) car.

Last winter, I got into a small accident because my car couldn’t stop on a hill. I refuse to subject myself to potential danger, and I will be doing something about my car situation. I’m looking for an All-Wheel Drive SUV that will make me feel safe when driving alone, but more importantly with the children I babysit (and my own children, when that happens!). Because I know a new car is in my future, I am setting aside extra money when it comes to me. That way I won’t have to take out a loan when the time comes.

Right now, I’ve planned to save $90 each week. Depending on how much you make, this could be a large portion of your paycheck, or a laughable sum. When is the last time you frivolously spent $90, though? I can do that pretty easily on one trip to Wal-Mart! Instead of allowing myself to spend the pennies remaining after my mortgage and utilities are paid, I have “already spent” the $90 that is divided across my accounts. It is not counted as available money, so I don’t spend it. In this way, I keep my finances in check!

Don’t miss, Part 1 - Roadblocks to Saving: Not Treating Yourself (Sometimes)

Alexandra is the owner of Real Simple Finances, where she writes easy finance tips for real people. In addition to fighting off student loan debt, Alexandra is a university English Instructor and will be graduating in May, 2014, with her Master of Arts.

Do you have planned savings goals every week? What items do you save for?

image credit; cat fanpop google images

    6 Comments

  1. Saving every week for some other purposes? Why not? This is a great idea and I will list this down as one of my New Year’s resolutions. :)

    Clarisse @MakeMoney Your Way

    November 7, 2013

  2. That is awesome you guys have saved for the holidays! So much better than having to pay for the holidays in a new year when you are trying to move forward.

    Amanda L Grossman

    November 7, 2013

  3. As a lifelong planner, I have to agree. I think the planning will help not only save, but keep your expenses under control too.

    krantcents

    November 7, 2013

  4. Krantcents, I am so jealous that you’ve had this wisdom under your belt unlike so many! It should be common sense, but for some reason planning ahead is a huge struggle for our ‘right now’ society. I am thankful for articles like this that gives specific situations that we can put into action and really see the benefits (and/or avoid the consequences).

  5. @Clarisse, I think setting up automatic deposits can really help in this way!

    @Amanda, Thank you. :) January was always a very stressful time because of bills — not anymore!

    @krantcents, That’s very true. I didn’t mention it here, but we also save for our yearly tax bills and our winter oil deliveries. It really helps to have extra cash on hand for things like that.

  6. Absolutely important to plan ahead. I suspect many people just go through the hustle and bustle of their daily lives without taking time periodically to think of such things. It can we well worth it to plan.

    As for the car, safety isn’t worth compromising!

    Ray @ Squirrelers

    November 11, 2013

Trackbacks/Pingbacks

  1. Carnival of Money – Controlling your Debt | - […] Friedberg presents Roadblocks to Saving: Not Planning Ahead posted at Barbara Friedberg Personal Finance, saying, “Learn simple tips to save for …
  2. Festival of Frugality Carnival November 12, 2013 | Financial Nerd - […] 101: Chart Progress To Stay Motivated posted at FI Journey. Barbara Friedberg presents Roadblocks to Saving: Not Planning Ahead posted at …
  3. Carnival of Financial Independence - - […] Friedberg @ Barbara Friedberg Personal Finance writes Roadblocks to Saving: Not Planning Ahead – Learn simple tips to save …
  4. Carnival of Financial Planning: 'make sure your money nourishes your life' edition : The Money Principle - […] Friedberg @ Barbara Friedberg Personal Finance writes Roadblocks to Saving: Not Planning Ahead – Learn simple tips to save …
  5. The Yakezie Carnival at Money Life and More — Money Life and More - […] Friedberg @ Barbara Friedberg Personal Finance writes Roadblocks to Saving: Not Planning Ahead – Learn simple tips to save …
  6. Carnival of Personal Finance #429 : Taking Risks Edition - […] Friedberg from Barbara Friedberg Personal Finance presents Roadblocks to Saving: Not Planning Ahead, and says, “Learn simple tips to …
  7. On My Own Two Feet-A Modern Girl's Guide to Personal Finance | Barbara Friedberg Personal Finance - […] backbone of financial security is saving. Instead of leaving you to wonder, how much to save, the authors challenge …
  8. Carnival of MoneyPros |The Frugal Toad - […] Friedberg @ Barbara Friedberg Personal Finance writes Roadblocks to Saving: Not Planning Ahead – Learn simple tips to save …

Post a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

WP-SpamFree by Pole Position Marketing