Know your money motivation

What motivates you to save? What moves you to spend? Use these values to make and meet short and long-term financial goals….after all, sometimes it isn’t so much what you earn as it is how you spend it. Don’t believe me? Read this…

Oseola McCarty was an African-American woman born in Mississippi in 1908. She never earned a high wage during the decades she spent doing laundry. That’s what makes her gift so surprising. In 1995 just four years before her death, McCarty announced that she would fund a scholarship for financially disadvantaged students attending the University of Southern Mississippi.

The fund amount she gifted was $150,000.00. McCarty, an amazing saver with a 6th grade education, lived without any extravagance and few conveniences. She had no car, and for many years, no cable or even air conditioning. In total, she saved $280,000.00. In addition to the scholarship fund McCarty left money to her church and family.

McCarty started saving as an 8 year old. She put away money earned from ironing and eventually went to the bank and opened an account. Maybe we can’t all be as frugal but we can learn from Ms. McCarty that saving is less about how much we earn than it is about how we choose to spend. What was her secret? In an interview printed by the Philanthropy Roundtable, McCarty says she saved money, made deposits but no withdrawals. 

Think about it

How are the lessons you have learned about money mirrored in your present day money interactions? What do you believe about money? What role has money played in your life? In what ways would you like to change your relationship to, or habits with, money? 

Saving is self care

Especially when you are worried that things are falling apart you may be likely to pray for a miracle or bury your head in the sand. That may work for ostriches, but it probably won’t work for you. The best way to figure out how to fix a financial jam is to face it. Be willing to get a clear picture of where you are and where you want to go.

If that prospect seems overwhelming, don’t panic. You don’t have to do everything right away. Choose one manageable task each month until you feel you have a good grasp of your financial situation.

Two good places to start making changes are with daily spending and emotional spending.

Daily Spending – how much money do you typically spend on miscellaneous items each month? These are things like morning coffee, take out food, magazines, soda, cigarettes, etc. Chances are it is more than you think. Even if you spend only $2 or $3 per day, that can add up to almost $100 per month. With planning you could use that money instead for a utility bill, a monthly bus pass, paying debts, or a pretty good start on an emergency savings fund.

Make it a little easier by being clear about the why of self-denial in the moment. It isn’t about deprivation. Think of it instead as saying yes to security, to purpose, to your future self – she is counting on you to build a safety net – you are saying yes to financial self-determination.

Alternatives to emotional spending

Be brave – your vision for your financial future requires extreme bravery. Sometimes you may have to disappoint others by saying no. That doesn’t mean you are selfish or a bad person. Look for ways to respond that are compassionate and helpful as well as in service to your financial goals. Maybe you can help the person in need explore alternative solutions. Always you can express concern.

Have something to hold onto – hobbies and other things you are proud of can help you stay grounded and feeling purposeful.

Create a refuge in your home – everyone needs restoration, healing and dream time.

Seek out new experiences – you might find that you get just as much of a thrill trying a new recipe or singing karaoke as you do from buying a new pair of shoes. You can be more without buying more. 

Check local listings for happenings in your town. There are usually a few free events each season such as book readings, festivals, parades, hikes and even concerts at colleges, parks and places of worship.

Gather friends for a vision boarding session. Saving and planning for your financial future can be more fun when you envision it with the support of like-minded friends. You only need some magazines (everyone can bring what they have), paper and glue. Cut out pictures of the things you are working toward and paste them onto a sturdy board or piece of paper. Post your vision board in a place where you will see it often.

Head to the park for a picnic or a game of Frisbee.

Host a pot-luck game night. Guests can bring their own snacks.

Check out your local library. There is always something free and fun to do there from yoga, language and knitting lessons to movies and chess lessons. Learning something new can help you create another layer of identity beyond your possessions. You might be what you eat, but you aren’t what you have.

Remember, you can’t really spend away pain, boredom or disappointment. Adding debt will likely make things feel worse.

Saving is self care

Forty-seven percent of Americans “can’t pay for an unexpected $400 expense through savings or credit cards, without selling something or borrowing money.” – Hunter Schwarz on June 8 in a Washington Post article

Don’t worry if you’re in that number. Just start where you are. Saving is particularly important for women for several reasons. Women are often concentrated in lower paying jobs, which means lower overall lifetime earnings. Also, women frequently live longer than men and can be financially vulnerable in cases of separation or death. That is especially true when children are involved. Ultimately, having money in the bank contributes to a feeling of security and peace of mind. Here are some ideas to try.

Keep a piggybank

Many years ago I helped my mother roll up $25 worth of pennies. She used the money to open her first account separate from my father. She still has that account today.

Consider your company 401k plan

When you contribute $25 of your pre tax earnings you reduce your tax base and you may even be eligible for company matching – free money. Even better, pre-tax contributions mean you save $25 but your paycheck is only about $20 less. It doesn’t matter that you aren’t saving as much as you want to save. It only matters that you start saving. You can increase your savings as your budget allows.

Consider an incremental purchase plan.

Maybe you don’t have enough to buy a share of Apple or Google. An incremental purchase plan allows you to purchase portions of shares. So if you can invest $25 you can start purchasing stock without a lot of cash. Providers such as Sharebuilder also offer automatic dividend reinvestment and automatic deductions. Easy breezy.

Set a small savings goal

Your goal need not be big. Just make one, such as $5 or $10 per month. Save the money through automatic deduction in an account you do not have regular access to. If your budget is just too tight to allow any saving, sell something you are no longer using. Consider a yard sale, eBay or Tradesy. Tradesy users can upload photos of clothing items they want to sell. When the item sells, transfer the money from your PayPal to your savings account.

Remember, you can’t buy your way out of pain or disappointment, so don’t try. The debts will likely make you feel worse. Tune in tomorrow for alternatives to spending.