I have to admit that my wife and I haven’t been great at saving money ever since we finished paying for our wedding.
We ate out regularly. Wait. Let me rephrase. I ate out regularly and my wife ate out sometimes.
We went shopping regularly. Wait a minute. Let me try this again. My wife went shopping regularly (keeping in mind that she’s very frugal with her shopping and really didn’t spend a large amount of money). I don’t really shop.
Don’t get me wrong. We were still contributing money to our retirement account and spending much less than we were making, but we just weren’t vigilant about making the right, sometimes hard choices with our money.
That all changed when we decided to build a house.
We’re Saving Every Penny Now
Here is where a lot of people are going to get mad at me. Some people will probably stop reading my blog after what I’m about to say, but I don’t care.
We are building a house at the very top of our budget. It’s obviously not over our budget (because the bank wouldn’t give us a mortgage if we truly couldn’t afford it) but we no longer have the luxury to be relaxed about our budget. We need to save as much as possible.
And boy have we done a dang good job of it.
In the last few weeks, we have pretty much eaten every single meal at home. We haven’t bought new clothes or other non-essentials. We have only seen one movie (and trust me, we love the movies).
Saving is Easy With a Goal
When I look at where we were a month ago, it was really hard to save money. There were plenty of good reasons to do it: save for retirement, make a bigger emergency fund, pay down Tag’s student loans, or maybe put the money to starting or buying a business one day. But none of those were concrete enough to force us to change our habits.
The day we decided to build a new house, we instantly changed our habits. Knowing that we only have about 9 months to build up savings before our house payment skyrockets gives us a very tangible reason to save money.
What is Your Goal?
A few paragraphs ago, I laid out a bunch of goals that could have motivated us to save money if we had really committed ourselves to them.
If we had committed ourselves to those goals a few months ago, we would have been in a better position to buy this house. There’s nothing wrong with switching your goals if you change your mind.
If you aren’t aggressively saving towards a goal right now, I strongly suggest that you find something you want and go get it!
Use Tools To Help You Reach Your Goal
If you are saving for a specific goal consider what you tools you can use to optimize the process. For checking accounts we like USAA Banks. Interest rates are currently terrible – you’ll get something like .01 to .15 percent interest in your money these days, however USAA has solid customer service and you’ll need spot to stash your cash. USAA offers free checking accounts, so it won’t cost you anything to sign up with them
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A couple of other tools to utilize are Personal Capital and Savings Honey. Personal capital is good because they have a ton of free tools which you can use to plan for your saving or investing goals. Savings Honey is a browser extension that allows you to find coupons for stuff you would normally buy, so its like free money.
James Hendrickson is an internet entrepreneur, blogging junky, hunter and personal finance geek. When he’s not lurking in coffee shops in Portland, Oregon, you’ll find him in the Pacific Northwest’s great outdoors. James has a masters degree in Sociology from the University of Maryland at College Park and a Bachelors degree on Sociology from Earlham College. He loves individual stocks, bonds and precious metals.
No grief about the top-of-the-budget house from me. You will never have a smaller family or less stuff than you do now. And your income will probably increase over time. While you could get a “starter home” and move up from there, buying and selling houses is very expensive, and the market is subject to major swings. When we got married, everyone gave us grief for buying something bigger than we needed (we were dead-broke students, and a 15×90 mobile home was more than our two poor selves really needed). Within a year and a half we had a baby and were soooo grateful we’d erred on the side of ROOMY instead of what we needed at the moment. Go for it!
I’m saving to build a “Financial Empire”, insert evil laugh, one penny at a time! But, along the way my smaller goals are, paying off the mortgage in 4 years, two in-state college educations for my daughters, 14 and 8 in 4 and 10 years respectively and retirement for myself and my wife in about 10 years, maybe earlier.
What are we saving for? Easy – a better future.
It’s hard for my fiance and I to give up movies. When we do go out, we save by using coupons and sharing food. Currently, my goal is to save for our wedding!