Written By Shannon DePalma
I could never save.
I could never have a “rainy day fund”
Money always needed to be spent NOW.
I tried to set up a savings account and then when I didn’t have enough money… I would just move the money from savings to checking to pay for that thing “I ABSOLUTELY NEEDED” (hint: I never absolutely needed it)
The biggest problem I had was that:
I never made enough money to save.
How was I going to ever save money if I’m always just getting enough to get by?
There was nothing left at the end of the month.
If I was “making more than enough” I would have something left over.
BUT THEN GUESS WHAT…
I started making good money.. like $15,000 in a month type of money.. and GUESS WHAT.
I COULDN’T SAVE FOR sh*t EITHER!
At that stage I found that there was always something to “invest in” for my business.
I found in order to save I had to realize these things:
Savings is intentional,
Savings has to have a goal,
Savings has to become a priority (like no really it is more important than your gym membership especially if you have debt).
If you have debt, SAVING is going to be your first step to paying it off.
Okay back to saving and what the f*ck happened to help me get to saving 6 months of expenses.
Here’s 3 money saving tips I did to become a girl who NEVER could save to having 6 months of savings in 1 year:
step #1: get really honest with myself
I didn’t want to look at my money.
I didn’t want to talk about money.
I was comfortable being broke. Like way too comfortable.
Although being broke is HARD it can also be comfortable. Because you don’t have to do anything but accept your broke-ness.
When people asked me if I budgeted, I was always like.. “noo I know how much I spend, I have an idea of my bills.”
The truth was.. I was LYING TO MYSELF about knowing:
“where my money was going”
“about having no money”
“about not needing a budget”
Lying to yourself FELT GREAT until it came time for me to start paying off debt.
Saving didn’t actually start with me wanting to save money, it came with me wanted to start paying off debt.
After reading thousands of blogs and watching Youtube videos about people becoming better with finances and paying off debt.
A lot of them said debt comes from not being able to pay for a $1,000 expense.
When I took a look back at my debt I realized a lot of it did come from emergencies.
Some of it came from wanting to buy nice things but a lot of it was because I didn’t have a savings account.
That’s why I kept building more debt.
It was time to..do something I never thought I could do and… SAVE. MY. MONEY…
step #2: bitch better count my money
Okay so now that I know I needed a savings to set me on a debt free path, my first step was to save $1,000 for an emergency expense, ( I later decided to turn this into 6 months because I’m an entrepreneur and my income can really fluctuate).
Me saving $1,000?
HHILLLLARRIOUUUUSSSS.
Again, I’ve never saved for sh*t!
So where did I magically pull 6 months of savings from?
Well I have to say being in a pandemic with not many places to go to spend my money, did make it easier to save money.
I found that maybe I didn’t NEED that Starbucks or I didn’t NEED to buy another shirt or I didn’t NEED to get a manicure.
What I found was that what I really did NEED was to feel safe with money.
A savings account could give me that stability and safety I had been looking for and I started looking at my money.
I’ve been using You Need a Budget since 2018 but wasn’t really capitalizing on using it to change my money.
I used it to see where my money was going and that felt okay.
Now I was going to start making a difference. I was going to start saying: now that I don’t need Starbucks or a manicure or a new outfit, how much of a savings account could I build and how long would it take?
It became so exciting to see that savings build that I started asking where else could I change my spending to see that savings grow fast?
I started ordering take out less.
I started cutting back on things in my business.
(Watch the video down below where I break down how to use YNAB to create your 6 month savings account. )
These things felt okay because I knew they were all temporary.
I definitely went more lean but it made sense at that time because hello.. where else was I going to go in a pandemic!? Everything was closed!
Even after when everything started to open up my habits had already changed, I saw what was possible with my money if I said no to things that I didn’t necessarily need.
I didn’t continue to live on my pandemic-quarantine budget because I would go crazy if I had to but I didn’t go back to the way I used to spend.
That is all thanks to MY BUDGET.
And yes… YOU NEED A BUDGET.
step #3: you’ve been lied to about “being rich”
What image comes to your mind when I say “rich woman”
Maybe an image of a woman wearing Gucci driving a BMW.
Or maybe an image of a woman at a beautiful resort or maybe a woman at a beautiful big house overlooking the ocean.
A lot of us have these ideas of what being rich is but the truth is rich is very different from wealthy.
I always thought someone was rich if they drove a BMW or Porsche, wore nice clothes, and had a nice house.. but did you know that doesn’t matter!?
Rich means you can make a lot of money BUT wealthy means you HAVE a lot of money that is continuing to grow.
Rich could mean you make a lot of income but don’t save anything. Like you could make a million dollars but spend a million dollars.
Wealthy = you use money as a tool to grow more money
Rich = you can make a lot of money but you spend it and don’t use it as a tool
Wealthy means you save money, invest it in stocks, bonds, etc, or into assets.
I never knew this or understood this until I started saving. I started reading more books and watching more videos about what TRUE wealth looks like.
It had nothing to do with what bag I had or what car I drove.
Then I did something REALLY fun.. I calculated how much money I could have had in a couple years if I didn’t have credit card debt.
After I created my 6 month savings account I went straight to paying off my debt.
When I saw how much money I could create in 15 or 20 years.
IT BLEW MY MIND.
I started to realize.. if I didn’t have to pay off my debt this is money I could have put into stocks or a Roth IRA.
BUT it also meant that guess what? Once my credit card is paid off.. I can put this money THERE!
Okay so I’ve paid off $20,000 in credit card debt and I still have about $6,000 to go… I know.. YIKES.
I put that in and realized that I could use the money that I would put towards interest or my credit card payment every month and put that into investments.. how much money would I make in 20 years if the market gave me a return on average of 7%? Which it usually does and this number is conserative.
TA-DA.
I can take this number 2 ways:
be depressed
be excited about what I can do for the future
I’ve been able to pay off the $20,000 within a year, so this just means in another year I can put this money into investments or into a Roth IRA.
What does this have to do with saving?
Once I began to realize that there would be a substantial difference in my future if I continued to live “rich” and if I continued to spend my money in places that didn’t really get me anywhere..
I could lose over 6 figures of my money.
I could have over 6 figures in my bank account if I continued to save and be start with my money in the next 20 years.
That seemed worth to me, more than Starbucks or getting a manicure.
How much money could you have in 20 years if you cut back on lesiurely things? (again: cut back do not eliminate!!)
Log into your bank account or credit card statement and see if they give you a breakdown of things you spend by category.
Pick a category you think you could cut back on
estimate how much you could take from that category
Now head to this link: https://www.calculator.net/investment-calculator.html
Put in 20 years and 7% for return rate
with monthly contribution being whatever you think is possible or $0.
AND PREPARED TO BE BLOWN AWAY!
(IF you really did this please share your number in the comments below!)
Then you get to decide.. what would you prefer?
What would make your heart happy?
Would it be spending your money now or having more in the future?
In 20 years I’m going to be 55 and have two kids in college, and I think I’m going to be tired and probably need money.
I would prefer to forgo my little things now that might make me feel good for allowing Shannon in the future to chill out and feel safe with her money.
What would you prefer?
Shannon DePalma
