Tuesday Tip Jar: How to Save Money When You Suck at Saving Money

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One of the problems is that the money is so damn accessible now. I’m old enough to remember pre-internet life where if you wanted to put money into savings you had to physically drive your car to a bank and deposit it with a paper deposit slip. Usually while someone stood next to you smoking a cigarette and talking about the latest episode of Magnum PI. If you wanted to withdraw from your savings, you got back into your Trans-Am, popped in an REO Speedwagon cassette, and drove back to the same bank where you filled out a withdrawal slip and took your money out.

Starting Credit Card Debt (01.01.19): $126,310.77
Current Credit Card Debt: $109,570.87
Total Paid Off: $16,739.90
Income Going to Savings: 2%

[06.27.19 Update] – Just got an email from Marcus saying my new APY is 2.15% and not the 2.25% called out when I wrote the post below. Make sure you check their site for the latest rates before signing up.

I suck at saving money. Growing up I lived in a household where if we made $15 bucks that month, we spent $15 bucks that month. If we made $1500 bucks that month, rather than just spending the $15 that we managed to get by on the month before, we instead spent all $1500. My family didn’t really save money, and for the past 25 years, I haven’t really saved money either.

One thing I want to be clear about is that I do have some money in a 401k account. On this blog I often talk about having zero money in savings, but when I say that I’m referring to my standard savings account.

Part of the problem for me was always ease of access to my savings. I’d put $500 in savings and tell myself I was NEVER going to touch that money unless it was due to some unforeseen emergency. Two weeks later AC/DC would announce a world tour and I’d think, “Well I need to see them. They are getting pretty old, and this will probably be their last tour. This really is basically an emergency.”

Once at the show, I’d buy a t-shirt, food, pay for parking, and of course buy a pair of those light up plastic devil horns to wear. Can’t be the only one in the crowd without plastic devil horns on after all.

So I’d pull that $500 bucks right back out, and have it all spent in a matter of two weeks. The next month I’d start all over again, each time finding some kind of “emergency” to spend things on.

One of the problems is that the money is so damn accessible now. I’m old enough to remember pre-internet life where if you wanted to put money into savings you had to physically drive your car to a bank and deposit it with a paper deposit slip. Usually while someone stood next to you smoking a cigarette and talking about the latest episode of Magnum PI. If you wanted to withdraw from your savings, you got back into your Trans-Am, popped in an REO Speedwagon cassette, and drove back to the same bank where you filled out a withdrawal slip and took your money out.

In other words, it took a fair amount of work to get your money in and out of savings, and thus once it was in, it tended to stay there.

Now with a simple click or two on the keyboard, I can shuffle money around like a hotshot coked-out Wall St. banker, but instead of a cassette I now listen to my REO Speedwagon on a streaming service, and I watch Magnum PI reruns on my iPad.

The point is that it’s too damn easy now. 401k accounts work so well because it’s nearly impossible to get your money out (or even borrow against it) once it’s in there and until the time is right.

So when it comes to saving money, I had to try a new approach. I decided the best thing to do would be to open an account with a bank that is not affiliated with my standard bank in any way. The reason for this is that with my current bank I can log into one app and move money from my checking account right into my savings account with the touch of a button. This is great! I can also move the money right back to my checking account with a touch of a similar button. This is not so great!

By having a separate bank, I have to do some additional work to move funds around. This gives me time to overcome impulse and remind myself that I put the money into savings for a reason. So far it has worked! I can honestly say that every dime I’ve put into savings since starting this plan 4 months ago has remained in savings, which is by far the longest stretch of my adult life.

After doing a fair amount of research, the bank I chose was Marcus.com. They are highly reputable and backed by Goldman Sachs, and their savings accounts have one of the highest Annual Percentage Yields at 2.25%, and the best part is…

THEY DON’T HAVE AN APP.

I can’t transfer things easily using a simple app on my phone. It takes some work to hit the site, log in, tie in my bank account, and transfer things over. It’s not quite the same as driving to the bank in a Trans-Am, but it’s about as close as I’m going to get in 2019!

They also don’t require a minimum deposit, and you can open multiple accounts. I created 3 savings accounts: Emergency, Standard and Dream.

Emergency: This is my “well I just lost my job” fund. The rule tends to be 3-6 months of salary. I’m shooting to save for 3. We’ll talk once I get there.

Standard: This is for normal life expenses. An example would be our homeowner fees that our community charges us. Expenses that we know are incoming, and we want to be prepared for.

Dream: This is for fun stuff. Vacations, camp trailers, ATVs, those types of things.

For now, my split goes like this: For every dollar I put into savings, 50 cents goes to Emergency, 35 cents goes to Standard, and 15 cents goes to Dream.

As mentioned earlier in the post, this is on top of the modest amount I’m putting into 401k each month. The goal over time is to get my total going into 401k up to around 10-15% and then putting another 5-10% into the various accounts I’ve mentioned above.

Once I hit my goals Emergency and Standard and feel good about where those are, I’ll increase the amount going into the fun stuff in my Dream Account while decreasing Emergency.

I don’t know if it’s the perfect system, but I feel pretty good about it. I’ve got money going to the “responsible side” of things, while at the same time putting just a bit towards the “fun side.” I’m also saving money, which in and of itself is a win for me!

If you are looking to reach similar goals, I highly recommend you checking out Marcus.com and taking a look for yourself. We used them for a consolidation loan for some of our higher interest accounts as well, and not only was it painless (5 minutes to get approved), it is also now our lowest interest rate account by far.

Do you use a similar method for savings? What’s your approach? Do you see potential holes in my system described above? Got an even better alternative to Marcus? Let me know in the comments!

If you’ve got thoughts about this post or any other post on Digging Out, I’d love to hear from you! Leave me a comment below the post, or send me an email via my Contact Page . If you like what you’re reading on Digging Out, and think others would enjoy the blog, please share the page with them and subscribe. Thank you!

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Disclaimer: I’m not affiliated with any of the products/services/tips I share on this site unless explicitly called out in the post. Please do your research and make sure these tips make sense for your particular situation.

2 thoughts on “Tuesday Tip Jar: How to Save Money When You Suck at Saving Money

  1. I started saving before there were IRA’s or 401K. I started with the emergency fund and when I had 6 months of expenses saved, I began a dream fund. Once IRA’s and 401K’s were introduced. I maxed out the contribution or the company match immediately. Over time I increased the % and after 50 added the $5000 catch up contribution. BTW I increased the emergency as my daily expenses increased and was able to take vacations. I also moved around a lot so I bought houses that I could afford on my anticipated retirement pay vs what I was making at the time. (Yes, there is a way to figure this out and there are a lot of calculators out there to help you). This way I knew I could afford my home in later life. I am now retired. I still have my emergency fund but now it is more for major repairs to the house. My vacation fund is quite large and I am enjoying travel. I really don’t “save” except with my company pension and social security and all the Senior discounts I don’t need to pull from my IRA’s, Roth or after tax savings. The common use to pull 4.5% of your investments to live on I guess would be my savings. I do “work”. Yet, most of the time it is pro bono. So when you start a plan and stick to it. You can enjoy everyday after working for so many years. I now travel a lot, give back to students and give seminars to encourage students to pursue STEM careers. Keep up the good work.

    Liked by 1 person

    • YES! This is so awesome to read, Karen. You are a true inspiration of where we’re trying to get to in life. We want to be able to give to others and share with those who made need some love! Right now our finances are holding us back from that, and it’s KILLING US.

      Thank you for sharing, and our kids both are big into STEM, competing in several events each year. Good stuff!

      Congratulations!

      Like

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