Advice for Saving Money For Someone Who's Horrible At It?

[Mage of Disney]

So, I'll say this right out of the gate, I'm absolutely horrible at saving money. As my mom can attest to (hi mom, I know you're on these boards!), as soon as I have money, I want to spend it. This is a bad habit, and I know it needs to be broken. But it's just so much fun spending money, and getting cool new things! And I spend way too much money on snacks. They're just so good!

I'm going to be down at Disney for my 18th birthday, meaning that I'll have a pocketful of cash to burn through. But I actually want to save money this year. Any advice to help save money for someone who seems to be literally unable to?

 

[TheGecko]

So, I'll say this right out of the gate, I'm absolutely horrible at saving money. As my mom can attest to (hi mom, I know you're on these boards!), as soon as I have money, I want to spend it. This is a bad habit, and I know it needs to be broken. But it's just so much fun spending money, and getting cool new things! And I spend way too much money on snacks. They're just so good!

I'm going to be down at Disney for my 18th birthday, meaning that I'll have a pocketful of cash to burn through. But I actually want to save money this year. Any advice to help save money for someone who seems to be literally unable to?

Set up a separate savings account which is not readily available (like a Capital One 360). Put you savings there where it cannot be easily accessed via a ATM machine or debit card. Save first prior to allowing yourself to go out and spend.

I will give you credit for at least acknowledging you have problem. Many people will not even bring up the topic.

 

[Mage of Disney]

Set up a separate savings account which is not readily available (like a Capital One 360). Put you savings there where it cannot be easily accessed via a ATM machine or debit card. Save first prior to allowing yourself to go out and spend.

I will give you credit for at least acknowledging you have problem. Many people will not even bring up the topic.

Thanks! I think that might really help me, especially since, unless it's right in front of me, I always assume I have money.
The first step is to admit I have a problem. The second is to actually do something about it.

 

[DL55]

Delayed gratification...Do you really need that new outfit right now? Try setting aside $ for the "cool stuff" and think about it for awhile before (or if) you buy.
Try to find something that is fun and makes you feel good besides shopping. It's all fun and games until the bills roll in. For every "want" I try to make sure I have saved that amount for a future "want" or "need" also.
It is easier for me but just remember there is a tomorrow.

 

[Jen and Ashwin]

Delayed gratification...Do you really need that new outfit right now? Try setting aside $ for the "cool stuff" and think about it for awhile before (or if) you buy.
Try to find something that is fun and makes you feel good besides shopping. It's all fun and games until the bills roll in. For every "want" I try to make sure I have saved that amount for a future "want" or "need" also.
It is easier for me but just remember there is a tomorrow.

Break this habit now, while you are young and the finances aren't as serious. Once you get out into the real world and have to support yourself and pay all of your own bills, you will be very glad to have built up good spending and savings habits. I agree with setting up an online only bank account. I prefer Ally Bank because it gives a higher interest rate return than Capital One 360.

You can actually open up several savings accounts and label them based on your savings goals. For example, I have an account that is labeled Disney Fund which I am using to save just for our next Disney vacation. I have automatic deposits setup to the account. It goes in right when I get paid so that I don't accidentally spend the money that I want to save. I use the same method for other kinds of financial goals too. I like seeing the accounts grow.

Something else that might help you save is setting up an account with Mint.com. You can link your bank accounts to Mint and it will show you all of your spending using debit/credit cards or checks. If you buy lots of stuff with cash, you can manually enter those purchases too. This helps you see where you are spending your money. It can be shocking to realize just how much you might be spending on snacks, clothes, gadgets, etc.

 

[Mage of Disney]

Break this habit now, while you are young and the finances aren't as serious. Once you get out into the real world and have to support yourself and pay all of your own bills, you will be very glad to have built up good spending and savings habits. I agree with setting up an online only bank account. I prefer Ally Bank because it gives a higher interest rate return than Capital One 360.

You can actually open up several savings accounts and label them based on your savings goals. For example, I have an account that is labeled Disney Fund which I am using to save just for our next Disney vacation. I have automatic deposits setup to the account. It goes in right when I get paid so that I don't accidentally spend the money that I want to save. I use the same method for other kinds of financial goals too. I like seeing the accounts grow.

Something else that might help you save is setting up an account with Mint.com. You can link your bank accounts to Mint and it will show you all of your spending using debit/credit cards or checks. If you buy lots of stuff with cash, you can manually enter those purchases too. This helps you see where you are spending your money. It can be shocking to realize just how much you might be spending on snacks, clothes, gadgets, etc.

Thanks a ton! I've never really had good spending habits, but since I'll be going to college in less than five months, I need to buckle down and start saving NOW.

I've never used Mint before, but I'm going to start using it now! Thank you!

 

[damskipi13]

So, I'll say this right out of the gate, I'm absolutely horrible at saving money. As my mom can attest to (hi mom, I know you're on these boards!), as soon as I have money, I want to spend it. This is a bad habit, and I know it needs to be broken. But it's just so much fun spending money, and getting cool new things! And I spend way too much money on snacks. They're just so good!

I'm going to be down at Disney for my 18th birthday, meaning that I'll have a pocketful of cash to burn through. But I actually want to save money this year. Any advice to help save money for someone who seems to be literally unable to?

I'm confused as to whether you mean you want to learn to save money long term, like for an emergency fund or retirement, or if you want to save money short term like for a Disney trip. Or, since you said you are unable to not spend money, do you want to learn not to spend money frivolously (which is not the same thing as saving money). I would give you different advice for each of these goals. Based on those three scenarios, here is some basic advice. Let me know if you want more.

1) Looking to spend less frivolously:
- set yourself a daily spending limit, and make it so that you have no way to go over this limit. For instance, if your spending limit is $10 each day, carry a $10 bill and don't carry any credit or debit cards.
- prioritize your expenses. Must have items (gas money, food, rent, etc) get paid before want to have items (new clothes, snack food). No exceptions.
- Determine the real value you are willing to pay. The best way I learned to do this is by figuring out how long I have to work to earn $xx, then comparing that to the price of the item. For instance, say you make $15/hr and work 20 hours each week, so you gross $300/week. But, you pay $50 in taxes and you have to commute, so really you get $250 for 21 hours of work, for a net hourly wage of $11.90. So a $5 item costs 25 min of work ($5 / $11.90 = 42% of an hour, or 25 min). I ask myself "Would I be willing to work an extra 25 min to buy that thing?" If the answer is yes, I buy it. If the answer is no, I don't.

2) Looking to save short term:
- a really popular way to save money is to set a rule for yourself to not spend certain types of money, and that denomination always goes into savings. For instance, you can never spend a $1 bill, so every time you get a $1 bill you have to put it into a savings account.
- This is where those accounts people mentioned above come in handy - Mint.com will allow you to track your spending and opening an online-only account (like Capital one 360) is an easy way to set money aside so you can't spend it without effort.
- This website has several other good ideas: http://www.getrichslowly.org/blog/2012/02/21/five-easiest-ways-to-save-money/

3) Looking to save long term:
- payroll deductions are your friend. If you never see the money, you won't spend it
- Learn about personal finance. A lot of people have trouble saving and budgeting because they simply were never taught how, or maybe they were taught about it but not in a way that appealed to their personality. Search out money bloggers who appeal to you. Some great ones for a young person are Afford Anything, Punch Debt In The Face, and Budgets Are Sexy. I also highly recommend the aforementioned Get Rich Slowly and, if you really get into this stuff, some of the more hardcore stuff like Early-Retirement.org and Mr. Money Mustache (he's intense, this lifestyle is not for most people but some people like it).

Overall: Do some googling and find some personal finance blogs that fit your personality. You'll be most successful if you learn what works best for you.

 

[QueenIsabella]

I wish you the best of luck--saving is one of those not-so-fun, "adulty" things that you just need to do.

Are you working now, and do you plan to work while in school in the fall? Are you saving for the Disney trip, or saving in general, or both?

You've already gotten some great advice. I'll give you some other thoughts. My oldest is 21, and lives/goes to school in Boston (we live in NC, so she's really on her own up there).

First off, if you're saving for Disney, consider buying a Disney gift card every paycheck. That way, you're forced to save it for your trip.

For everyday stuff, here are some things that worked for us (DD and myself): we got her a credit card at our local bank before she left. This may seem counter-intuitive for a spender, but it's a joint card with a fairly low limit. Since she had a card, she wasn't tempted by all those offers at school. She had established a relationship with this bank--important if there's an issue (there hasn't been). She always tells me when she uses the card--the bills come to me, and I pay them (usually). She generally uses it for books and plane tickets. She's establishing credit and has it for emergencies.

For everyday stuff, DD has a savings account and a checking account. She's written maybe 3 checks total, but uses her debit card all the time. She has an app on her phone that tracks her spending (HIGHLY recommend this!). The bank automatically transfers funds if she needs it, or she can do it on her phone. Having the two accounts makes her think about the money.

She works full-time in the summer (working at her school this summer, low pay but free lodging), and has work-study (10 hours/week) during the school year. Last year, she lived in an apartment, and tried to stretch her work/study to pay for food. This was not 100%, but it did make her think about her purchases. She wouldn't actually "be" broke, but feeling "broke until payday" helped her resist impulse purchases.

I also think it's important to have some fun money. But, budget this--I have X to spend this week--I can buy those cute shoes, or I can get lattes all week, not both.

As a mom, I know my DD is trying really hard to budget well. I do help her out, by sending cash, gift cards (Trader Joe's or Target, sometimes a bonus Starbucks). Her school also has their own funny money point system, where she can use her points for laundry, food, etc. I send her those sometimes, too. She's been learning to balance her life, which is an important step.

 

[teller80]

Congratulations on recognizing that budgeting is a good habit, it's a very mature thought process. There are so many people that are in their 50's and 60's that don't have that foresight.

I would recommend the Dave Ramsey method. You can google it but basically it's a cash only system. Dave's plan is to pay off the smallest credit card debt off first, then the next smallest, and so on. It's about reaching a goal, and there is a certain high that comes with reaching that goal that makes you work harder. So I would also start with a small savings goal ($50), and then increase the next savings goal ($75).

It'll be tougher when you go to college but not impossible. Good luck to you and welcome to the Dis! Please come back and let us know how you're doing!

 

[HeatherC]

Whenever you get paid or get a sum of money...Automatically take 20% and put it into savings. If you do this every time it becomes automatic and will set you up for a successful financial life. Don't look upon it as saving...just think of it as your paycheck is actually 20% less than it is.

When you start working full time after college, do this with a 401k or IRA from day one. You will be amazed how quick the money grows.

So if you get $20 just take $4 and put it aside and forget about it.

 

[wenrob]

My DD 19 has her pay checks auto deposited into her savings account and then transfers what she needs for bills and spending to checking as needed. Your only get six online transfers a month so this really makes her stop and think. She has set goals for her savings account and once she gets to a certain amount she doesn't want to go under that so will often put something she wants on hold until her next payday. This is a system she devised herself and it has worked beautifully for her.

Aside from paying her phone bill (on our family plan) and that she is living at home, I haven't had to float her money for anything since she was 16, she pays for everything she needs or wants herself. Gas, insurance, hair, clothes, nights out etc. is all on her. My suggestion is that if you don't already you start paying for these types of things yourself so that you can get an idea of how much it really takes. It's hard to justify an impulse buy if you have bills that must be paid. Do you want Starbucks everyday or gas in your car? Those cute shoes or your monthly haircut? These are decisions that everyone needs to make on the daily and is something you should get in the habit of.

You absolutely should have spending money but as mentioned above it should be a set limit that you stick to. See something you want that costs more? Save this weeks money and combine it with next weeks. If it's something you really want, it will keep until you can reasonably afford it. Nine times out of ten you will find you really don't want or need it or that you managed to save the cash and now don't want to part with it. The more you delay instant gratification the easier it gets to just walk away from impulse buys.

 

[crisi]

Another thing to do is to teach yourself to enjoy NOT buying something. You can see it and want it and think "well, I don't really have anywhere to wear it" or "I already have six pairs of shorts, do I really need these" and then praise yourself for your wise decision making. If you love it, take a picture of it, take a picture of the tag so you can find it again, and buy it later. Chances are, you'll get home and forget all about it.

The best hobby I ever picked up was buying stocks - it let me shop and buy and save all at the same time.

 

[wenrob]

Another thing to do is to teach yourself to enjoy NOT buying something. You can see it and want it and think "well, I don't really have anywhere to wear it" or "I already have six pairs of shorts, do I really need these" and then praise yourself for your wise decision making. If you love it, take a picture of it, take a picture of the tag so you can find it again, and buy it later. Chances are, you'll get home and forget all about it.

The best hobby I ever picked up was buying stocks - it let me shop and buy and save all at the same time.

I have dozens of pics like this on my phone. There's only been a handful of things I've ever gone back for and usually those are gifts I was thinking about maybe getting.

 

[ceecee]

I applaud you for noticing your mistake and wanting to correct it. Budget and write down what you spend on everything. Dave Ramsey has some good books too.

 

[ruadisneyfan2]

It's good that you recognize this as a problem when you're young and can start working to correct it now. My ds16 had a little job a few hours per week when he was 15. With no real expenses, I asked him to save half which would still allow him to splurge on some things and most likely still have more pocket money than a lot of his friends. Well, this was like pulling teeth. He looks at putting $ into savings as if I'm taking money away from him.
Even after I showed him how quickly his savings accrued from the previous summer when I paid him for mowing our lawn each week straight to his savings account, he was surprised how much it had grown, but it still didn't sink in.
Dh told him to look at it as "paying yourself first" before forking it over to cashiers. Hopefully he understands more as he matures.

 

[Jen and Ashwin]

It's good that you recognize this as a problem when you're young and can start working to correct it now. My ds16 had a little job a few hours per week when he was 15. With no real expenses, I asked him to save half which would still allow him to splurge on some things and most likely still have more pocket money than a lot of his friends. Well, this was like pulling teeth. He looks at putting $ into savings as if I'm taking money away from him.
Even after I showed him how quickly his savings accrued from the previous summer when I paid him for mowing our lawn each week straight to his savings account, he was surprised how much it had grown, but it still didn't sink in.
Dh told him to look at it as "paying yourself first" before forking it over to cashiers. Hopefully he understands more as he matures.

Some kids have a harder time with it because they have never had to really pay for anything themselves. But some kids are natural savers. My parents opened my first savings account for me when I was 6. It made me feel so grown up to have my very own account and I loved going to the bank to make deposits with my mom. I was always a big saver and would put most of my birthday and holiday money into my savings account. Even big events like Bat Mitzvah and graduation money all went into savings. I didn't really spend that money until I put the down payment on my first house, which is what I always told people was why I was saving, even at age 6!

If I had been given that marshmallow test as a kid, I would have been the kid that waited for two marshmallows instead of just one. But my brother and sister were terrible savers even though my parents treated them exactly the same. They would get money and just spend it right away. My brother has since become much better, so good saving habits can be learned as well as coming more natural. But sometimes it takes maturity and sometimes it takes living in reality and actually paying bills, etc.

 

[DisneyArie]

I set up a high interest savings accounts (Ally Bank had the highest at that time). I had payroll split up my check so that a set amount goes directly into the savings account, and the remainder goes into my regular bank account. I never get to spend that money because I don't even think about it. When I get my paycheck deposited into my bank account, that's the amount I operate off of. Also, because my account with Ally is a savings account instead of s regular checking account, I don't have a debit card or checks so I can't have a moment of weakness and spend that money

Another thing I do is research prices like crazy. I'm always on the hunt for a deal. I won't buy ANYTHING unless I am 100% certain it's the lowest price I can get. I look to deal site, coupon and get rewards whenever possible.

Something that has helped me with impulse buying is to take a picture of the item. Let's say I want to buy something (want is the key word). I will take a picture of that item as a reminder. If I still want it in a few days, I will go back for it. Honestly, most times I forget all about it and don't purchase it. Don't get me wrong, I do splurge every now and then on something I don't "need" but I make sure to have a coupon for it. Just got a Mickey waffle from kohls for a $6 inclu tax (was originally $39.99). No, I don't need it, but the kids and I will both love to have Mickey shaped waffles leading up to the trip and when we get back to remind us of the trip.

 

[DisneyArie]

Another thing to do is to teach yourself to enjoy NOT buying something. You can see it and want it and think "well, I don't really have anywhere to wear it" or "I already have six pairs of shorts, do I really need these" and then praise yourself for your wise decision making. If you love it, take a picture of it, take a picture of the tag so you can find it again, and buy it later. Chances are, you'll get home and forget all about it.

The best hobby I ever picked up was buying stocks - it let me shop and buy and save all at the same time.

Just read your message after I had already replied. This is such a good idea. It really works for me and has helped tremendously. Great advice!

 

[ruadisneyfan2]

Some kids have a harder time with it because they have never had to really pay for anything themselves. But some kids are natural savers. My parents opened my first savings account for me when I was 6. It made me feel so grown up to have my very own account and I loved going to the bank to make deposits with my mom. I was always a big saver and would put most of my birthday and holiday money into my savings account. Even big events like Bat Mitzvah and graduation money all went into savings. I didn't really spend that money until I put the down payment on my first house, which is what I always told people was why I was saving, even at age 6!

If I had been given that marshmallow test as a kid, I would have been the kid that waited for two marshmallows instead of just one. But my brother and sister were terrible savers even though my parents treated them exactly the same. They would get money and just spend it right away. My brother has since become much better, so good saving habits can be learned as well as coming more natural. But sometimes it takes maturity and sometimes it takes living in reality and actually paying bills, etc.

So true. My ds19 OTOH is such a saver. We put aside $600 to keep in a joint account while he was away at college to be used for misc expenses. I think he spent around $75. We preach the same ideas to both kids but some just have to learn the hard way. lol.

 

[naomiatx86]

1) Looking to spend less frivolously:
- set yourself a daily spending limit, and make it so that you have no way to go over this limit. For instance, if your spending limit is $10 each day, carry a $10 bill and don't carry any credit or debit cards.
- prioritize your expenses. Must have items (gas money, food, rent, etc) get paid before want to have items (new clothes, snack food). No exceptions.
- Determine the real value you are willing to pay. The best way I learned to do this is by figuring out how long I have to work to earn $xx, then comparing that to the price of the item. For instance, say you make $15/hr and work 20 hours each week, so you gross $300/week. But, you pay $50 in taxes and you have to commute, so really you get $250 for 21 hours of work, for a net hourly wage of $11.90. So a $5 item costs 25 min of work ($5 / $11.90 = 42% of an hour, or 25 min). I ask myself "Would I be willing to work an extra 25 min to buy that thing?" If the answer is yes, I buy it. If the answer is no, I don't.

Wow, this is the mentality I need when I go to the $5 dollar store.

Such great advice on this board.