Ally Bank recently tweeted on Twitter something that caught my attention: “Your greatest challenge to saving on a regular basis is __________?”
I quickly sent a response with something that has challenged us in the past but I think is common for many people that I’ve spoken with: “Excuses! For the things we think we need!”
Don’t you feel like there is always something coming up that you feel like you need? Do we really need some of these things over the priority of saving money? I think many people would reason they do. There is always the additional monthly expense for gas, family in-town, travel, work related expenses and so on and so on. But can these things really trump the importance of saving money? Hopefully not, but how do we keep them from doing so?
Ally replied to my tweet asking me if I cared to share my savings strategy. I replied with the following: “Our budget & paying ourselves 2nd to giving.”
My wife and I start with an organized plan or budget to insure we save a set amount each month. Otherwise, we easily find ways to spend this money. Again, we easily spend on all those things we reason we need.
We make saving our second priority to giving. For our family, giving/tithing will always be the first thing we do with our money. After giving, pay ourselves in savings to insure we have a safety net and invest for the future.
After giving and saving responsibilities are taken care of, it’s our responsibility to manage the remaining money and prioritize spending with what’s left. The simple rule to follow for all of us is to avoid spending more than we have left after giving and saving. This means we can’t spend more on a credit card than we can pay off with our next paycheck. Even better, pay out of our checking account with a debit card that earns rewards makes more sense than getting careless with a credit card.
As I mentioned, our biggest obstacle to saving money on a regular basis can be the things we reason we need. I’m curious to get your thoughts. What obstacles have you encountered to saving money and what is your savings strategy?