Money Lies: I Can't Save & Invest

Have you been telling yourself this lie? “I can’t save money and invest.” That is a LIE!

This lie keeps people broke for their entire lives. When we are young, we believe we have forever to prepare for retirement. After all, young people and young families need to provide for their household, their children, and are just starting out in life. There never seems to be enough money to put away for a rainy day or for the future.

If you tell yourself this money lie, there never will be enough money to save or invest. If this is you, TODAY is the day you stop believing the lie and begin funding the future!

Here are some practical steps you can take to explode your financial future:

1. Understand compound interest.  Compound interest is what will allow an investment of $100 per month to reach $1,176,477 in just 40 years! If you just save a little ALL of the time, you will end up with a LOT at the end of your time! Use our “Investment Value Calculator” to see how much you could save!

2. Take advantage of retirement plan matching.  If you work for another company or organization, there’s a good chance your retirement plan contributions are eligible for matching contributions from your employer. Whether it is a $0.50 per $1.00 match or a full “dollar for dollar” match, it is FREE money! Visit your Human Resources Department TODAY to ensure you are receiving the full company match.

3. Make saving and investing MONTHLY (at least) and AUTOMATIC.  If you have to rely on yourself to write a check each month, your savings plan could be in great danger! Make it automatic – have it deducted from your paycheck before you ever receive it or have it zapped out of your bank account at a predetermined date each month.

You will be on your way to becoming a wealthy individual who will be able to live a life of generosity like you’ve never dreamed!

5 Proven Strategies To Save Money

I am a HUGE fan of savings accounts.   I am an even HUGER (I made up that word) fan of savings accounts with money in them!

Here are some proven strategies for piling up HUGE CHUNKS of money in your savings account:

• Save the “magic month” paycheck

  • If you are paid weekly, you normally receive four paychecks a month, but there are four months each year where you receive FIVE paychecks.   Budget and live your life on four paychecks per month and you will be able to save the extra paycheck every three months!    

  • Paid bi-weekly?   Budget and live your life on two paychecks per month, and you will be able to save the extra paycheck during those two magic months each year when you get three paychecks.

• Save the TAX REFUND

  • As a spender, I know that the word “fun” is right in the middle of the word refund. However, maybe the right thing for you to do this year is to SAVE your tax refund.

• Automatically send 10% of paycheck to savings

  • If the money makes it home in the paycheck, it is at risk of special magic disappearing acts – even for the most conservative of people.   Set it and forget it.   You won’t regret it.

• Save the BONUS

  • Don’t spend it – just this once.   Put it into savings.   It is amazing how great it feels to be able to say, “NO!”, to yourself and put your BONUS into the savings account. It gives you the feeling that you truly are in control of your money!

• Sell something

  • The old RC airplane in the garage just needs to go.   So do the bikes that you don’t ride.   So does the boat you use once per year – it’s cheaper to rent one when you need it.   Put the money into savings.   You will end up with a cleaner and neater garage and attic and a plump savings account!

Remember, we each have a unique financial journey, so it's important to adapt these strategies to suit your specific circumstances and goals. The road to financial stability and security is paved with consistent saving habits. Start implementing these strategies today and you'll be well on your way to achieving your fully funded life.

3 Ways To Save Money

One of the largest issues I see during our one-on-one financial coaching meetings is the inability to save money.

Here are some facts about saved money:

• Saving money is essential to long-term sustainability

• Saved money relieves stress

• Saved money allows you to take a chance

• Saved money allows life to happen (job loss, disability, pay cut, injury, etc.) without going broke!

But you already knew that part.  We all know that we are supposed to “save money for a rainy day.” Yet, even though we KNOW how important it is to save money, most people fail to do so. However, if you do not save, you can not prosper.

I challenge YOU to take the next step. If you have negative savings (no money plus overdrafted accounts and debt), the goal is to bring you to zero. If you are at zero savings, the goal is to get to at least $2,500 in a beginner emergency fund.  If you have been able to save a substantial amount of money, it is my hope that you will participate in the discussion and share your own tips that have worked well for you.

Automatic Draft From Paycheck

Establish a savings account and have the money drafted from every single paycheck.  Whether it is $25 or $250 per pay period – just SAVE!  You KNOW that the car is going to break down.  You KNOW that the school is going to send home a surprise expense.

Establishing this draft, it allows the money to be “out-of-sight.”  When money is out-of-sight, it can be out-of-mind.  This allows the account to grow without you robbing it!

Now, I personally had a problem with this when I did not have a monthly budget.  I would ROB my own savings account about 2.1 microseconds after I was paid.  Only after I had a plan developed together with my bride, Jenn, did my savings account begin growing in a healthy manner.

Create An Escrow Account For Known, Upcoming Expenses

For those unfamiliar with an escrow account, it is a savings account that is established by a mortgage company.  The mortgage company totals the annual cost of property taxes and homeowner’s insurance and divides it by the number of payments being made each year.  The mortgage company then pays for the taxes and insurance from this escrow (savings) account.  For example, if the property taxes are $1,200/year and the insurance is $600, then the total amount needed each year is $1,800.  The mortgage company will collect $150 extra with each monthly payment to place into the escrow account.

An escrow account smooths out the cost over a year – instead of having to pay for it all in one month.  It tightens the monthly budget, but having a fully funded escrow account sure is AWESOME when vacation arrives and the money has already been saved to pay cash for it!  Those who have a mortgage with an escrow account will testify to the fact that they never worry about paying for the taxes and insurance – ask someone!

Establish Accountability

Find someone who is:

• winning with money,

• not trying to sell you something

• available to help you.

Ask them to hold you accountable to your saving goal.  I have seen some people go to the extreme length of actually giving the money to the other individual to hold for them because they cannot trust themselves to keep their own hands off of it.

Accountability can also be created by your written spending plan that you prepare every month before the month begins (you do prepare one, right?).  This plan helps cement your goals in your mind and helps you connect the fact that if you spend money on unplanned items, you will literally be robbing yourself of your savings goals.

I am married – which means I have built-in accountability.  Jenn is a huge saver.  She keeps me (the spender) in control. Establish accountability – it works!

Sustain Good Financial Decisions: Automate Your Banking

We’ve all had moments where we have firmly stated our resolve to do something different with our money. Usually, the outburst follows a negative financial outcome. Perhaps we’ve overspent on our vacation. Maybe we have the starting realization that there is no money in the college fund for our high school senior. It could be that we’ve dipped into the overdraft account again. Whatever the case may be, it causes us to commit to better financial management.

Here are some common statements people make in these moments:

• “I’m going to start preparing a written budget each month.”

• “I’m increasing my contributions to the retirement plan.”

• “Let’s open a 529 college savings plan and begin making monthly contributions.”

• “I’m cutting up the credit cards.”

There is just one problem with each of these statements: saying it doesn’t make it true.

For every statement and moment where we commit to better financial decisions, one must actually do the work to follow through. And, my friends, we all know that it is truly hard work. Life is so busy. We’re exhausted. Plus, many of these decisions require information and knowledge we may not currently possess. This is a recipe for failure to follow through on really good financial decisions.

And we’ve all been there, haven’t we?

Let’s flip the script, and put in place some “best practices” that can really help us sustain these good financial decisions so that we can reap the benefits they can provide us: fully funded lives, dreams accomplished, and freedom to live generously.

Sustain Good Financial Decisions – AUTOMATE

Many good financial decisions can be followed through with automation! This is perhaps the easiest and best tip possible because it is literally a “set it and forget it” solution that ensures your financial decision is put into practice. If there is any possible way to automate your decision, do it.

Here are some great examples of using automation:

• Committed to save money every month for the annual family vacation? Set up automatic drafts from your bill paying account to your savings account.

• Want to help your child with college expenses? Open a 529 college savings account and establish automatic drafts.

• Ready to up your retirement investments? Log in to your 401k (or similar RSP) account and adjust the automatic contribution.

• Want to ensure your retirement money is put to work right away instead of sitting in a savings or money market account? Establish automatic investment selections.

• Want to ensure all of your bills are paid on time? Automate every single bill payment. As an added bonus, you will spend far less time paying bills!

• Want to ensure your retirement investments become more secure as you approach retirement? Choose a targeted retirement date investment fund that will automatically become less risky as you near retirement.

What good financial decisions have you been making that could leverage the power of automation to ensure they are sustained into the future?