This is a subject everyone cares about but many are reluctant to discuss openly: money. One of the most empowering lessons you can learn is that there's more to money than just buying stuff. Savings can help you achieve a bigger goal or smooth over shakeups in your life like a career change or moving to a new place. Savings mean security and options. Here are some tips for building up your own nest egg.
1. Set a goal: If you don't have savings, your first goal can be to set up an emergency fund. Most financial gurus suggest aiming for three months' worth of living expenses as a initial goal. You can also set goals for projects (e.g., that new business you want to start) or a big purchases (e.g., your first home.)
2. Be unapologetically thrifty: Thriftiness used be a virtue. Would I like the $12 pressed coconut juice at that cute new juicery in town? Sure. Do I need it? Nah. Is it overpriced? Definitely! Am I missing out by not having it? Not if I choose to not make it important. Don't let anyone make you feel bad about what you choose to buy or not buy, or what you can or cannot afford, especially when it comes to things that are superfluous like a fancy juice.
3. Be entrepreneurial: The flip side of spending less is trying to earn more. Easier said than done, I know. Many of us don't know it, but we moms develop skills well-suited to business: multitasking, organizing, determination, self-sacrifice and not being afraid to get your hands dirty. When we apply these skills to something else we care about, sometimes a business blooms. Initially, my consulting practice started out as me writing a few emails from my kitchen table while my toddler napped. Now my work helps support my family and grow our savings.
As a rule, avoid pyramid schemes that sometimes get circulated by well-meaning people. Stick to what works and what you know.
4. Get on the same page: Family savings only work if it's a goal everyone shares. Determine a realistic plan with your spouse or partner. It's important to be transparent about everything related to your family's financial well-being. Older kids need to understand too, but frame it a way that inspires confidence. Rather than saying, "We can't afford that toy," say, "We're not getting that because we're saving for something more important."
5. Pay down high-interest debt: If you have high-interest debt, your long-term savings are a major disadvantage. Paying the minimum means you'll end up paying far more over time, which takes away from your family's potential savings. With that in mind, develop a plan to attack high-interest debt.
6. Enjoy life without spending (much): My sweetest memories are filled with people, not things. For instance, my daughter and I enjoy going to the library together, where we get a few new books to debut at bedtime. It costs me nothing but it's always a highlight of our day. Other activities a family can enjoy that don't have to be spendy: home-cooked meals, museums on free days, picnics, hiking, playground playdates, dancing, yoga, movie nights at home. You might find that by spending less, you experience more.
7. Budget with purpose: The secret to sticking to a budget is not getting bogged down on the restrictive nature of it. You can either feel bad about having to budget or you can feel good about saving money. I plan ahead, compare prices, shop during sales and always look for a promo code when shopping online. I splurge from time to time, but the reason a splurge feels special (rather than guilt-inducing) is because it's a rare treat. Splurges still need to be reasonable though. That is, a splurge shouldn't wipe out your savings and all your hard work. When budgeting gets you down, recall the purpose motivating it all.
7. Be relentless: There will be setbacks along the way. Just when you feel like you're making progress on your rainy day fund, you might get hit by a thunderstorm. Don't be discouraged. You can always pick yourself back up. Doing so is an essential skill all adults must practice and it's a life lesson worth teaching our kids. Success and savings must be relentlessly pursued.
