Tuesday, October 27, 2015

Save For A Rainy Day AND For the Winter of Your Lifetime - Having a Healthy Bank Account is Paramount to a Healthy Life!!!

I have had this post in mind for some time, and even had this draft saved with just the title so I would be reminded to get to it at some point.

It (the topic), and blogging in general hasn't been a priority for reasons I have stated before, but this is one topic I think I need to cover.  I certainly don't have the readers I use to on a regular basis, but I do get hits from certain topics being Google'd or Bing'ed, so maybe what I have to offer in the way of experience and advice might help even just one person, then that's OK by me.

What really brought this back to my attention is something that recently happened to a 'friend'.  I put the word in quotations because I honestly don't know her in real life, but through a series of online sites that brought together like minded people who loved Texas music.  After thinking about it further I figured out I had never even seen a photo of her.  Weird.  But I've 'known' her for years.

Anyway, regardless of all that, she could be anyone that any of us knows on any given day.  You always hear that the percentage of the population is one paycheck away from being homeless.  And that you should have 6months to a year of emergency money, and while those are lofty goals they are achievable for some, easier for others and sadly, yes impossible for a lot.

Her husband passed away just a few months ago, and while I am not sure of their exact circumstances, its been obvious that he hasn't worked nor she in some time.  I suspect since he was a vet, possibly disability etc.  I don't know.  But regardless of the circumstances, which are neither here nor there.

She has posted a few things on Facebook since about difficulty in receiving benefits, and having to file this or that which I understand to some degree (went through it w mom when dad died; and then with mom it was pretty easy).

So over the weekend she posted on FB something about her landlord being postal because she didn't have the rent and that she was guess going to have to move.

This struck me as CRAZY.  How is it that you are in your 50's (old enough to know better) and with an ailing husband for however how long that you didn't start to make sure you would be able to handle the finances at least for a month!?

How do you not have ANY money?  And that's just the rent.  What about food, or utilities?  Someone stepped up and started a money drive to get her the money she needed for rent, but I don't know...something about it didn't set right with me.  I am just going to leave it at that.

Now I have gone through a couple of hard times when losing a job, but even on those couple of occasions I STILL had a bit of a savings.  I had to use a lot of it the first time around (2003) but I also took a few months off so I used more than I prob should have.  I had just sold my house and had about $40K in the savings and checking.  I underestimated how long until I found another job (was less pay) and overestimated how much money I could blow.  Lesson learned.

Even again when in 2008-2011 when $ was tight, way less money at job, I still was managing to save to 401K and a bit here and there for my savings.  And cannot forget the amount of $$ I lost with the nose dive of the market.  But its recouped itself since...which is why the market is generally safe.  Over time. 

Since, at the time, I thought those times were SO tough I have become quite the saver since mid-2012.  Yes it was easier while in NE, plus I consolidated all my debts and pay on that 2 times a month much less than I was having to before (but got overextended and I paid the price for that eventually), which also helps.  Plus for the past 4 years I have paid cash for ever single thing I've bought.  And just yesterday I finally paid OFF OFF OFF that consolidation loan and for the first time in my life since the age of 20 I am COMPLETELY DEBT FREE!!  It took me 4 years, but it was supposed to be 5, but I paid it off early somehow; all the while still saving, saving, saving...and even managing to get a new (to me) car: Its a 2013...but way better than the 2003 that I had!

I am getting off track here, but my point is that NOW while whatever age you are (and I started at 32 I guess; some years more than others on the amounts) so that you don't have to worry about such things.  And if you aren't worrying, you should be.  Living paycheck to paycheck is no fun!

I am going to spout out numbers here, for reference sake, but everyone is different.  You set your limits, rules and budget.

One example is that I NEVER let my checking account go under $3,500.  If it goes below that or near it basically all spending halts.  Or crawls for example if I need gas that's a no brainer.  Food?  I always have some food so I can go till payday if I have to :O)
When I moved to NE, I had $1000 in the checking and about $3000 in savings.  No need to include 401K and my IRA's since I cant get to those anyway.

But now in checking I am generally sitting between $3700 and $5500 (AFTER bills are paid) and my savings is roughly $22K and I automatically send money to that savings acct each and every payday.  Right now I am saving for a down payment on a townhome plus the padding for after I put the down payment in someone's pocket.

I also go to the bank every payday, and withdraw a certain amount of money; some of which I put away in a hideaway in the house for Christmas and another of which goes into my purse for my 'allowance'.  Money that I can spend and don't worry about tracking.  Its like petty cash to me.

I am scared SHITLESS of being that person who has to move or God forbid be forced into a shelter or the street because I lose a job and cant pay.  I mean how sad is that? 

It has taken a lot of sacrifice (living in the tundra for 2 years) being away from family etc., but I achieved financial freedom again because of it.  I didn't splurge on things I didn't need (well ok I did, but only when it didn't interfere with my numbers!!)  IF it was going to set me below my limits then it had to wait until the next payday!

I make my own coffee at home, 75% of the time I bring my own lunch/snacks.  Every little bit helps.  And no I do not deprive myself of eating out, Sbux, buying clothes etc.  I think if you know me well enough (or thru here) you would know that is not the case.

I just make sure IT FITS IN MY BUDGET. 

Why pay more when you can just wait?  Instant gratification costs money.

I feel somewhat confident that if something were to happen God forbid at least I would be OK for a few months you know?  Also knowing that I have, at this particular point in time close to $80K (should be way more but ugh, my 30's!) with about 15 more years left to work I am going to be a lot better off than the majority of people I know who will unfortunately have to work a lot longer than I will.  And probably budget a lot differently as well even with SS.  As it stands now, I will be COMPLETELY DEBT FREE in 2 years.  I do plan on replacing my vehicle though (its 11 years old now), but intend on a used car/cash.

I feel REALLY bad for this person I mentioned above.  I really do.  But I also don't understand how that happens?  Especially at their age.  It wasn't like they were in the 20's when doesn't everyone live paycheck to paycheck??  LOL.

Also, just because you have kids, or a house or things of that nature, you can STILL save money.  I did it.  I had a house too once you know?  You just have to remember that at some point, before you even know what hit you, you are going to be my age and these things will start to actually MATTER....

If you're employer doesn't offer 401K then start an IRA.  I have 2 IRA'S and my 401K.  I no longer am able to contribute to the IRA's for a couple of reasons due to my income and how much I already contribute to my 401K.  But I have moved them in with my primary bank so that I can easily monitor all my money in one place instead of 3.

So as you can see I save a lot of money when and where I can.  I also don't go without that's for sure, but I just prefer to splurge on the things that bring me the most pleasure:  GOOD food choices at the grocer and when eating out as well, paying for high ticket items with cash and not worrying about how I would pay rent (most recently my big splurge was new mattress/boxspring). Clothes when I want, if I want.

I don't mean to make it seem like if you cant save a large amount that you shouldn't because everyone has to start SOMEWHERE...even if its just $10 a paycheck...sock it away...join your 401K for the min % allowed but if you can do the max that the employer will match (FREE money!)...BUDGET...
Go without ... maybe just cutting back from 5 Sbux a week to 4 or even 3...figure out the amount you saved and boom, move it to a savings account.

Put limits on your bank accounts!  I just recently did this and it keeps me from overspending in a 24 hour period; I have to REALLY think about what I am spending from checking in that 24 hours or otherwise it will get rejected if I go over and I have it set pretty low to be honest.  FOR a reason duh; whether its using a debit card or withdrawing from savings.  Also it protects you if your card is stolen too...

If you have no way to save ANY money each month then you are overextended.  You have too much house.  You spend too much here.  Or there.  Or somewhere.  When figuring a budget you HAVE to calculate in SAVINGS.  YOU.  JUST.   HAVE.  TO.

The end.

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