YES, E-V-E-R-Y-O-N-E! Even if you’re in a relationship and you have joint savings, you each still need your own Fuck Off Fund. If you haven’t read A Story of a Fuck Off Fund by Paulette Perhach, it’s a must! Perhach refers to the Fuck Off […]
I owe a lot to the #debtfreecommunity on Instagram. I started an account as an online diary to track my progress and keep myself accountable in paying off six figures of student loan debt. At the time, I didn’t even know that an online debt […]
Some people love to squirrel money away and enjoy watching their accounts grow.
I’ve never been one of those people.
Money available meant money to spend – at one point even credit available meant money to spend! While I’ve worked hard over the past few years to rewire those thoughts, I’m not quite at the point where savings sitting in an account is comfortable for me. I still have an impulse to either spend or, more recently, pay down debt.
Although debt reduction is a positive financial move, sending too much of your cash flow to creditors and leaving yourself without any emergency funds isn’t a stable way to operate. I think many of us tend to put emergencies on a credit card and gradually pay them off. My one concern with that method, other than the potential interest charges if you can’t come up with the funds by the payment due date, is navigating a situation where your pay is late. We can’t pay our rent with a credit card here, and I’m not about to take a cash advance to pay for housing. Cash advances are the most expensive types of credit card transactions, with fees, higher interest, and no grace period.
That’s why I hide money – from myself. If I didn’t set up my financial environment in a way that encouraged saving, I wouldn’t have an emergency fund to fall back on and I’d be at risk of incurring more, and higher interest, debt.
Some of the things that have helped me keep at least $1,000 in savings for over a year – while saving for retirement – are minimum balances, separate banks, online only accounts, and automated savings.
The standard advice is to find accounts with no fees and no minimum balances, if available. I found that the most successful way for me to save a $1,000 emergency fund was to deposit that money into a chequing account at my local credit union that had a $1,000 minimum balance to keep the account free.
If I withdraw any money, I’ll have to either pay $7/month to keep the account open or head to the bank in person to close it and avoid the fees. Just the whisper of this hassle has been enough for me to leave that money alone and make it work with the funds in my main account.
I love simplicity as much as the next person, but sometimes I need to set up as many barriers as I can to protect me from myself. That’s why my $1,000 emergency fund is in a bank that I don’t use for my main chequing account. If I needed to access the cash I could, but it’s not an account I think about.
If possible, try to forget you even have an emergency fund! In a real emergency, you’ll remember. One caution about this – some banks charge fees for inactivity. I usually just transfer a small amount between accounts (make sure you aren’t charged any e-transfer fees! always with the fees..) or make a deposit once a year to keep things current. Often you can request that fees be waived, but if you’ve noticed I don’t really like talking to anyone in customer service unless it’s absolutely necessary.
Online Only Accounts
I have $25 in a high interest savings account with an online bank – I received that money as a sign up bonus and I’ve kept it there earning 2.30% interest which is about $0.05 per month – woo! The bank doesn’t have a physical location or a debit card, which makes it a decent choice for an emergency fund that I’d be hesitant to touch. I can easily transfer it to another account free of charge if I needed, but that extra step would make me pause and reconsider.
When I’m debt free, I plan to keep six months of expenses in this account. Why don’t I keep my $1,000 emergency fund there now, earning that 2.30% interest? I don’t trust myself yet. The friction of transferring money between accounts isn’t quite high enough to give me confidence that it will act as a deterrent. I’ve come a long way, but as someone with a history of addictive behaviour related to money and spending I want to be absolutely sure I can keep it there untouched unless there’s a legitimate emergency.
Automating your savings for immediately when you get paid (or before, in the case of workplace retirement savings) is a game changer! I have automatic contributions to retirement deducted from my pay before it even hits my account. Since I set this up when I first started working, I’ve never noticed the money leaving every month.
Automation is a great hedge against lifestyle inflation too! Whenever I get a raise, I increase the amount of my payments going to debt and when I’m debt free I’ll be doing this with savings instead. You don’t have to be responsible with all of your income increase either – even a 50/50 or 25/75 split (or whatever ratio you decide) can help you boost retirement while enjoying some of your extra earnings now. Who says that current you and future you have to be in conflict with each other over money?
Break In Case Of Emergency
I don’t personally do this, but I’ve seen the idea around and I love it. Take $1,000 in cash (or whatever amount your emergency fund is), place it into a picture frame, and write “break in case of emergency” on the front. Obviously you can just take the backing off and get at your money without the broken picture frame and subsequent visit to the hospital, but the visual cue is a way to remind yourself that this money is earmarked for emergencies only.
Anyone out there with a coffee can of money buried in their backyard? Don’t worry, your secret is safe with me!
Today marks the anniversary of one of the worst industrial disasters in history – the Rana Plaza building collapse that killed 1,134 and injured another 2,500 on April 24, 2013. Severe cracks in the Bangladesh garment building’s walls compelled police to require an evacuation. Disregarding […]
Have you ever received one of these letters from a bank? “Congratulations on being a responsible credit user! We’d like to offer you an increase on your credit limit. We appreciate your business and hope you enjoy this extra purchasing power!” Now, to me that […]
The novelty of trends and designs
The time between unwrapping a perfect object and its first sign of wear, entropy in action
The marking of occasions and milestones
The feel of soft fabrics running through my fingers
The thrill of completing a task that only a list maker could truly appreciate
The expression of personality
The lights and sounds and subtle scents of new beginnings
The distraction from difficult moments
The not-so-casual conversation with strangers paid to make me feel good about myself
The sense of control in a life that felt out of it
Shopping isn’t just a stereotypically frivolous activity that we shame women for enjoying. It’s a complex web of sensations and neurotransmitters. How we feel can be as important as what we buy. When we try to overcome an unhealthy relationship with spending simply by stopping, we remove a source of fulfillment and a coping mechanism from our lives.
Unsustainable at best, destructive at worst.
You deserve to feel all of those things – pleasure, joy, accomplishment, celebration, originality, excitement, distraction, confidence, novelty, control.
Find them wherever you can, in ways that aren’t accompanied by the guilt and anxiety that overspending can be.
Visit a museum or art gallery and lose yourself in the expression
Create something with your hands
Take a walk outside and touch the space around you
Clean and care for the things you already own
Learn a skill that ignites you and puts you off balance
Volunteer and be a force for change
Strengthen relationships with people who lift you up
Speak to a therapist about your closely-held insecurities
Do something you’ve been afraid to
Carve out time and space for yourself, violently if necessary
If you just like to shop – embrace that too.
In a world that questions our every step, walking confidently in your own direction is its own act of self-love.
Some recommend avoiding all luxuries while paying off non-mortgage debt – no travel, no meals out, no purchases other than necessities. I’m not one of those people. A few of my friends and family members have passed away at young ages, and I know that […]
Being transparent with your finances online is interesting. I know it helps to see real numbers which is why I share everything, but there are obvious downsides. Like, all of the times people tell me that they wish they had my income. I can’t help […]
I’ve tried many different spending challenges over the years – not buying clothing for a year, setting up a budget for specific categories, not eating out for 100 days, aiming for a certain number of $0 spend days every month. I can’t argue with the results – last year I reduced my spending by $7,000 and paid off $30,000 of my student loan debt. This year I’m trying something new.
I’m giving myself permission to buy whatever I want.
Yes, I’m surrendering to the treat yo self mentality. I am acknowledging that I am a human and that my wants are valid. I’m setting myself free to buy anything that will add value to my life – as long as I make the actual purchases later.
I created a list called Things I Want To Buy – In 2020. At that point, if all goes well, I’ll be debt free. After I increase my emergency fund and ramp up my retirement contributions, I’ll be free to spend the surplus. Note that I said surplus, meaning that I can spend whatever I want after my savings goals are met and without borrowing money to do so.
I don’t know what I’ll want to buy at that point, but I’m off to a great start. My list contains everything from the banal to the luxurious, from a can opener and a sheet set to a $250 pair of boots and several international trips. I’ve got a section for physical items, and a separate section for travel & other experiences.
As time goes on and my desires change I fully expect to add and remove things. I might even save various versions as miniature time capsules of the items and experiences that occupied my thoughts.
For list lovers, this exercise has an obvious draw. By recording all of the ideas floating around in your mind, you’ve allowed your brain to remove them from the forefront of your consciousness. Often I’ve felt overwhelmed by multiple tasks and then relieved when they seemed to shrink in number just by being captured visually.
For completionists, there’s the comfort in finishing something – ideally the list of potential purchases will replace the urge to buy an item in order to get it off of your mind.
For impulse purchasers, the act of recording and then waiting should allow the rush of novelty to pass. You’ll be able to remove the item from your list later, without it ever manifesting physically in your life. No buyer’s remorse, environmental impact, or feeling like you should keep things you no longer want simply because they cost money.
For rebels, saying “yes, but later” to your wants feels so much more gratifying than saying “no.” Often when we deprive ourselves we simply move the pendulum too far and then let it loose to swing wildly in the opposite direction. When we say “yes, but later,” we allow ourselves to find balance more easily.
I can identify with each of these personas, which is why shopping mindfully has always been a challenge for me and why I hope this new exercise will help me make even better choices in the future.
Will I still make purchases over the next two years? Of course. If something I use often breaks or wears out and can’t be repaired, I’ll replace it. If an item stays at the top of the list for months and I decide I don’t want to wait anymore, I’ll probably buy it. There might even be a few impulse purchases in there, if I’m being completely honest, and that’s okay too.
The point of this exercise is not deprivation. It’s realizing that while some things are worthwhile to purchase now, others can wait.