Simple Solutions To Post-College Savings Struggles

A lot of people want to save money but few are able to consistently do it over time. It sounds simple enough in theory: “save 10% of your income.” However, the difficult part is not understanding the “why” or the “how much.” The real challenge is dealing with all the curve balls life throws your way without losing the habit of saving.

Simple Solutions To Post-College Savings Struggles

In this article, I will address some of the most common challenges people face when trying to save money.

“My budget is extremely tight and I keep seeming to have emergencies that drain my cash.”

The early phase of saving is the most difficult. It’s not that you don’t recognize the value of saving, it’s that you have so many other immediate needs competing for each one of your hard earned dollars.

To make things more difficult, if you’re like the typical college graduate you have somewhere around $35K in student debt hanging over your head. Even just making the minimum payments can take up a large portion of your budget, leaving little room for saving.

The important thing to realize, at least in the beginning, forming the habit of saving is more important than the actual amount that you save. 10% is a common number given because most people can afford this amount if they really comb through their financial history and eliminate unnecessary expenses.

If you can’t even manage the regular 10%, just start with 5% or even 2%. Just do something easy to get started.

“My progress is so slow; it’s hard to keep up the motivation to save when I hardly see any results.”

Here’s a parable that helps keep me motivated when I get discouraged by seeing little results.

Imagine that you had a “magic penny.” Every month this penny would double in value. So in Month 2 you would have $0.02. In Month 3 you would have $0.04 and so on. For a while it would seem that your magic penny isn’t doing you much good. After entire year of holding on to your magic penny you only have $20.48–hardly a fortune. However, after 3 years you would have over $343 million!

Now, the point of this story isn’t to say you’ll double your money every month. The point is that small things that grow exponentially make a big difference over time.

A small amount of money set aside can grow over time and be invested in things like education or sound investmentment opportunities–which produces more money–which means you can invest more and get even more money, and so on.

So keep up hope and don’t get discouraged by the small beginnings!

“It seems like basic necessities are getting more expensive. I frequently have to go over budget just to get what I need.”

The reality is that the prices of goods will fluctuate. At the time of this writing, gas prices are under $2 a gallon but just a few short years ago they were closer to $4 a gallon.

One way you can “trick” yourself into saving more money is by creating your budget based on the most expensive prices that you remember a good being. For example, if you estimate that you use 20 gallons of gas a month, make your budget $80 a month (based on $4 a gallon) instead of $40 a month (based on $2 a gallon.)

Normally, your spending won’t hit the maximum that you set so you can “roll over” the money into your savings account. This can actually be a good alternative to the standard 10% rule. With this method you will save less on difficult months and more on the easier months. Your savings will “automatically” adapt to your situation.

“I wish I had an emergency fund or could get ‘ahead’ on my bills but I just can’t seem to do it.”

Many people want to set aside an emergency fund before they start seriously investing money. This makes sense. The same principles discussed in the previous situation apply here.

Rather than setting a monthly savings goal, you could simply “over budget” and set aside the difference as an emergency fund. For example, say you budget $100 a week for groceries. You end up spending $87. You put $13 in the emergency fund. You actually ended up saving over 10% but it won’t really feel like you’re stretching the budget.

Saving money is difficult but it doesn’t need to be a burden. Most people simply aren’t aware of these simple tricks they can use to save money without breaking the budget. The key is to budget on the high end and set aside the difference. Keep this up for several months and you’ll start to see encouraging progress in your savings accounts!

About the Author

Gwendy Taylor is a busy Do-It-Yourself mom who discovers that matter how many times she double checks the diaper bag, she always forgets something important. When she’s not trying to fix things around the house, you can find her writing about family life.