Even as I thought about making the goal of saving â‚¬1500 in 2009, I cringed inside. How was I going to set aside â‚¬125 a month, or â‚¬4.11 per day when some months we go into the red just by living? Shouldn’t I be tossing as much money as possible into paying down our debt instead of simply resolving not to take on any new? Aren’t I getting things a bit backwards?
I decided to take this path for a few reasons, both practical and emotional.
First, as many financial gurus preach, I want the safety and security of an emergency fund. If something happens- to a car, one of the cats, a major household appliance, I would like to know that we could solve the problem without having to take on new debt.
There’s also the aspect that (cough), we’re not getting any younger. I have never thus far in my life been successful at saving any considerable amount of money towards my retirement, and I have dragged my husband down the path to the poorhouse right along with me. If not now, when? â‚¬500 towards retirement may not seem like much, but it’s more than what we currently have, sitting in a mayonaise jar on my bedroom shelf. I’ll give you a hint as to how much we have- it rattles.
Finally, the third reason that I want to save money instead of paying a debt snowball or snowflake on my remaining debts is that it is incredibly hard to make extra payments on debt in France, because payments are automatically withdrawn from your checking account every month. I have to have a special reason to pay extra, such as needing to pay off the car in order to improve my chances of getting a mortgage, by lowering my debt burden. It’s not likely that any of the above is going to happen in the near future, so I think it’s best that the extra money goes towards savings.
So how to make â‚¬125 a month, when our budget is stretched to the breaking point? Well, we’ve already sold what we could sell and trimmed the fat from what could be trimmed. Sure, our eating out habits could go on a diet, but that’s not going to account for all the money needed every month. We simply won’t be able to find that money in our regular monthly income; remember our earnings have already taken a hit because I went back to school.
Here I’m using a trick: diverting funds. Any extra money that I get every month is going to go straight into the emergency find, and not by way of our regular account either. Doctors’ reimbursements, presents of cash, revenue from this blog and my Etsy shop will all be deposited in our ING account. It won’t be the same amount every month, but it will grow it in leaps and bounds. No longer will that extra cash go into treating ourselves to something or padding out the monthly budget- we have to start paying ourselves first.
Are you able to save money when your budget is tight? How do you do it? Do you pay yourself first? Eat ramen noodles? Snowflake? I’d love to hear your managing techniques!