One of the big mistakes we all make when considering making a change is trying to do too much at one time. We decide we need to eat better so we plan to eat less meat and more vegetables – better make those organic, and even though I don’t cook, I’ll make it all from scratch. On and on, our plan gets bigger and better and as a result, less likely to be executed.
What we should do is plan in baby steps. Start small and celebrate your successes.
Today while listening to a coach advise one of his clients, I just wanted to yell, “Baby Steps”.
The client was a 28-year-old living in Chicago making 45K a year. She has a student loan balance of 30K, a $1000 emergency fund and a very generous employer who monthly pays an amount equal to 15% of her gross into a 403b. The coach was harping on and on about getting this student loan paid off so she could save more for retirement.
Really? Come on; she’s trying to live in Chicago on 45K. First thing we need to do is throw this girl a party; she is a rock star – 28 with 37K in retirement and no credit card debt. Who does that? The answer is very few.
The coach was right when he said that she needs to focus on paying off those student loans. But let’s not try to inspire her by tempting her with calculations of how much she could be worth when she’s 67. She has a lot a life to live before 67. Maybe a really cool vacation, a wedding, a condo? Live a little, girl.
We need to give this young woman a chance to learn that saving is not a bitter pill; it is not a diet devoid of chocolate. Once she sees herself as a saver, her financial future will be much more secure.
The way to learn to be a saver is to start small. In the beginning, it is a lot easier to save for a want rather than a need. So what do you want that we can get in three paychecks? How much can you set aside out of each check?
Swim with Manatees – $35 plus lunch and gas, $35 out of each check
Take your mom to Julio Iglesias – 2 tickets at $60, $40 from each check
4 night Cruise with your friends – $300, $100 out of each check
Try it. Pick a three paycheck goal, something fun and get going.
Once you can successfully do the three paycheck goal, try a six paycheck objective.
Visualization helps a lot; so draw a thermometer, post it on the fridge, and color it in after every check. Get the kids involved and they will naturally grow into savers.
It is easy-peasy to learn to be a saver:
1) Pick a little goal
2) Set the time period and the amount from each check
3) Record each increment as you save it – in color on the fridge door.
4) Party! You are a saver!
Of course you know that we do need to save for cars and retirement and less fun things like roofs and medical needs, but once you become a saver the rest is easy.