Let’s Talk Saving: Planning for a Financial Future
One of my goals for 2020 was to be better financially. I decided to start with reading Smart Women Finish Rich by David Bach and talk to a few financially sound coworkers. It’s shocking about how little the teach you in school and how much you need to figure out on your own. Here is some of the major advice I learned:
The Latte Effect
For some, saving seems impossible. David talks about how you really do have an option to save or invest based on how you’re spending. For example, if you’re getting coffee and a croissant every work day ($5) you’re missing out on $25 a week or $1,300 a year. The little things add up. For me, my guilty pleasure is eating out for lunch on Monday because I haven’t meal prepped or Friday because I’m lazy. Depending on the NYC prices that can be costing me $520-780 a year! I’ve also noticed that about once a month I splurge on one or two clothing items. I’m currently trying to figure out how I can combat that spending.
Shopping with a Different Mindset
When I first heard about sustainable fashion, I thought it was impossible to get into because the products are so expensive. In reality, the products may be expensive but your cost per wear is actually very low! For example, if you buy a cheap, fast fashion shirt from Marshall’s or Zara it may be cheap in the moment. However, the reality is that the times you’ll be able to wear it is actually making it expensive. When you do buy something, save up for it and invest in good quality so it actually lasts. I’ve also been trying to buy more neutral pieces that can be styled multiple different ways. Thank you #10x10challenge!
Dad’s Retirement Advice
Both my parents and one of my brothers are teachers. This means that their retirement is set up a little differently because they have a set pension that they paid into. For people in the business world, things are a wee bit different. Depending on what company you work for, you should have a 401k in place. 40% of companies in the states match what you put in that 401k. So if you’re not putting money away you are missing out on free money. Once you can hit the threshold for the year ($19,500 if you’re under 50 and $26,000 if you’re over 50) you then should start putting money into a RothIRA. The 401k will give you money monthly that you can live off of and your Roth will give you money you can play with (travel, spas, adventure). Don’t worry if you can’t max out your 401K right now (I certainly can’t), this should be a goal you work towards.
The Importance of Starting Now
Most of my readers are at the tail end of college or in their mid 20s. It is critical that you start saving for retirement ASAP. It will cost you a significant amount less if you start saving early because you have more years so spread out the cash. If you start in your late 30s you’ll have to put away a significant amount of money in order to catch up to someone who has been saving at their early 20s. Start putting away 5% of your check and eventually work up to 12%. David recommends 12% because that equates to paying yourself an hour of your day. Now you definitely don’t need to max out your 401k right away (I definitely can’t do that right now) but the goal is to definitely put some away so you aren’t missing out completely.
Other Ways to Save
- Sell clothes on Poshmark before you buy something new (I show how to do that in this post)
- Budget your money with YNAB and track where your money is going through NerdWallet. (I talk about these apps in this post)
- Learn how to meal prep to save money (post on this coming).
- Buy CD (certification of deposit) so that you can make interest rates of 2.15% instead of 0.03 on your savings account. (Still learning how to do this).
- Open a separate savings account that isn’t attached to your debit. Have a percentage of your paycheck go there and forget about it.
- Have a shopping problem? Pay for things only in cash. Go to the bank and take out enough money for the week. You’ll be shocked how different it feels to hand over five 20s instead of a plastic card.
Book Review
If you want to start being better with your money, you need to check out this book. David talks about how important it is for women to be involved with her own finances as well as the family’s. The first three chapters are informative if you aren’t already a feminist but other than that you could probably skip it. By chapter 4, David shares his brilliant ideas on how to be financially independent. A must read for women of all ages.
How are you at saving? Do you have any questions about how to save? Have any financial books you recommend? Let me know in the comments down below.
P.S. I still 75 pages of my book to go! Might have to do a follow up if anything else is mind boggling (which I’m sure there will be)!
As always,
27 Comments
shianne
LOVE this i need to get better at saving so great tips
PeculiarPorter
Thank you so much! It’s definitely a must read!
SundayDahlias
Shopping with cash is a good tip! When you’re actually handing money over, rather than a plastic card, you get a better feel for how much money is actually going out!
https://sundaydahlias.com
PeculiarPorter
I couldn’t agree more! There is something about actually seeing it makes a huge difference!
Mica
These are great tips – especially the shopping with cash one! this sounds like such a good read and it’s nice you got so many lessons from it (even if we don’t have the 401ks or the roth things here in Australia!
Hope that you are having a great week 🙂
PeculiarPorter
Oh my goodness, I didn’t even think about retirement plans not being universal. The book does have really good tips besides that!
jenniferpickering22gmailcom
These are such great tips. I need to read this book.
Jennifer
Effortlessly Sophisticated
PeculiarPorter
It is such a good read!
allisonwdunn
ok bookmarking this page & buying this book !!! lol I’ve been more seriously saving in the last year and now I’m planning my wedding and the expenses can be SO overwhelming!
xo, allie
http://www.champagne-tuesdays.com
PeculiarPorter
Oh my goodness, you should definitely download YNAB to organize your money! It’s been so helpful for me. Also, this book is a total must read!
Naya
LOVED THIS! What a wonderful summary and so many useful tips on saving. I agree about fast fashion being more or less a useless investment, because these clothes never last. Same about coffee – I have estimated last year that I would normally spend over 1k on takeaway alone (which is insane). Ever since then I bought a coffee machine (capsules I consume per year cost 1/4 of the total takeway price) and a reusable travel mug (less plastic waste). Great one, Logan xx
Naya
http://www.nayatilly.com
PeculiarPorter
I’m so happy to hear that you’re saving money AND helping the environment all in one go! It’s such an important point that single use items can be so expensive in the long run! Cheers to cutting spending and stopping single-use!
Jessica
Sounds like a good read. I’d love to check this out. Thanks dear!
Jessica | notjessfashion.com
PeculiarPorter
It’s such a good book! Highly recommend!
yuka
that sounds like a great book! will def need to check it out!
http://www.prettyinleather.net
PeculiarPorter
Yes! It’s such a good read!
Matija
I’ve always been good at saving!
You first point about the Latte effect is basically how I live in relation to food and grocery shopping! Meal prep or simply bringing food for home really amplified my savings. My simplicity journey has really helped me save more because I only buy what I need xx
https://matijascorner.com/
PeculiarPorter
Ahh, I love hearing that! Bringing food from home is such a great way for saving money and helping the environment – a win win in my book!
Ashley
I LOVE these financial tips, lady- and I need to read that book. I’m just dipping my toe into stocks (downloaded the Robin Hood app) and have bumped up my 401K contributions this year. Saving early means you don’t have to save a TON later in a way shorter span of time!
-Ashley
Le Stylo Rouge
PeculiarPorter
Oh my goodness – exactly! The more we can save a young are the better we will be in the long run! Also Robinhood is great! If you haven’t looked at M1 yet I recommend that as well! It’s a great app for learning more about stocks and seeing how they’re doing!
em-ily-hein
It is so true that no one really teaches us much about finances in school. How crazy is that?! I loved reading your tips and am excited to start implementing them! Thanks so much friend!
PeculiarPorter
It’s literally nuts! I hope some of the tips work out for you gf!
The Style Contour
It’s been a year since we’ve really taken our savings very seriously and it’s been great seeing the positive results of that. I believe it’s imperative to keep track of spending in order to know where there might be areas of unnecessary or overspending, which can hinder the growth of one’s savings. Thanks for sharing your thoughts here and I hope you have a great week!
XO,
Jalisa
THE STYLE CONTOUR
PeculiarPorter
I am so happy to hear that you’re seeing positive results! I definitely agree that keeping track of your spending is extremely helpful. I love using YNAB and NerdWallet to help me underspend!
Sonia De Macedo (@soniademacedo)
I find it incredible HOW LITTLE we are taught about finances in school. Or life skills in general, but finances truly should be high priority. I mean we all rely on this! I’ve made so many mistakes when it comes to my money, and all those lessons were learned and hopefully not to be repeated again. It would have been wonderful to have had an idea about how everything operates but alas, no. Saving is something I am working on bettering myself this year. I had a shocking year financially last year and want to build those savings back up again.
Sxx
daringcoco.com
PeculiarPorter
I couldn’t agree more. I had no idea what to do with my retirement plan until I read multiple sites and this book! I highly recommend reading this book if you need a little place to start. I’m hoping 2020 brings you financial success!
Pauliina
Thanks! I will definitely read this book as I just started my saving journey