Guest Author Todd Romer, Founder of Young Money University, recently provided a financial wellness workshop for RMUoHP students, Do Money Differently: 5 Simple Steps to Live a Life That Fits Your Dreams.
Whether you’re a part or full-time student, parent, spouse, or single the thought of managing your money can sometimes be overwhelming. For many of us saving and managing money is a stressful deal. Most of us resign to how we were taught (directly or indirectly) to save money during our teen years. I want to help you retire some outdated thinking about saving money once and for all.
- Remove Your Single Savings Account Mentality: You and I know it’s super easy to spend money out of your bank or credit union account called “savings”. Whatever cushion you think you have in that one account from time to time, it can quickly be gone as we feel we need that new pair of jeans, full outfit or latest tech gadget. In our minds, we have ideas for what our single saving account will be used for but let’s make it easier on ourselves with doing #2 below.
- Create Multiple Named Savings Accounts (Digital Envelopes): Replace your “savings account” with multiple named savings accounts that you can put a nickname too. Such as travel savings account, short term emergency savings account, car repair, clothes/shoes, new car, entertainment, furniture, etc. Set up savings accounts that align with your life and lifestyle. The temptation to spend money on a whim from a single savings account will diminish now that you’re putting names to nearly every dollar of your income. Be sure to find a bank or credit union that has no more than a $10 account minimum and no fees for setting up multiple named savings accounts.
- Start Automatic Saving: Once you have created your multiple named savings accounts then create monthly automation. For example, you can have $30 going from your checking account to your clothes/shoes savings account on the 15th of each month and $50/mo going to your car repair savings account to stave off the inevitable that happens to all car owners in the future.
By following these tips you will see a reduction in financial stress by saving money this way instead of having a single savings account that’s responsible for many “things” in our head. You got this!
