How To Create a Savings Plan With Purpose and Definition

Welcome, welcome, welcome to today's episode. We are talking about the importance of saving and why it matters to you for your financial stability and essentially your financial freedom. If this topic is of interest to you, be sure to jump in on my 90 days summer savings challenge where We're kicking off live in your inbox June 3rd. So if you're interested or need to learn more click the link in the show notes or visit my website and be sure to get yourself registered. So back to the topic of the importance of saving. I just want to demonstrate this sharing two different stories and now these are on a lower end and as you think about life and possible events Obviously saving more is necessary, but I just wanted to start with the little things. So one story I want to share came from a good friend of mine who was relating that a good, that a connection of hers was expressing to her that he had dropped his phone. He had shattered the screen. The cost to replace the screen was 400. So in following up with him later, she learned that he didn't. quite have the money to pay for that. So instead, he chose to add another line to his cell phone plan. So just one demonstration of a financial decision that comes about differently due to a lack of savings. The second one that I want to share with you, I was having a conversation with my niece and a good friend of hers. She had her vehicle. She'd had it for a while. The tires were in need of replacement. The cost was well over a thousand dollars and so she obviously did not have a savings fund for that. She made the decision to trade in her vehicle. get a new car and continue on with her monthly payment, but she also has new tires. So, that, those are just two stories I wanted to just share. They're on the smaller end of quote expenses, um, emergencies, financial events that will happen or needs that we will have that really are supported through savings. And due to these individuals not having their savings they needed to make a different financial choice. And so hopefully sharing that you can see that not having a savings can perpetuate your struggle with money longer and farther. Right? Having to continue that loan on that new vehicle definitely extended out. So she's going while she was comfortable with that amount every month. I understand that it is a continual drain on her money. If she was already struggling not to save, this just leaves her in that same path. So some common misconceptions people have about saving and that may force them into maybe overlooking or ignoring the importance. The first one I want to talk about is they're immediately thinking, I don't make enough money to save. I'm living paycheck to paycheck and I just don't have the funds. Honestly, I've only had one of my clients in this situation as a true reflection in looking at their money. So I'm encouraging you if this is something you're subscribing to and this is something you're believing about your situation, I want you to get some clarity behind that. I want you to look at your money. Start first, if you've heard me before, I share income equals expenses, that is a budget, and see if that is a true equal. As I also shared, um, expenses involve your bills, your spending, and your savings. So if you can, um, if you are not quite equal spending your income, then you definitely have money to save. So gain some clarity, look at your numbers, go exploring, and make sure that statement is true, as opposed to just thinking that that is the belief. Most of my clients after I sat with them through our first session, um, it gave them clarity as to how much they can actually save every month. And even with my low income, client, um, was one, she was able to save over 400, 400 a month. So there's always room. There's always support. And then how you are, are tackling those savings, definitely another subject for another podcast. But if this is you and you're struggling, go grab my financial clarity checkup, my free download. It'll walk you through exactly what I do in that first session with my clients and help you answer this question whether it's true you don't make enough money to save or if you do have just a different way to look at your money. Another misconception or belief that people may struggle with is saving is the same as hoarding, right? This can come about as I work hard for my money so I need to spend it. Yep, I worked hard. I worked hard for 32 years punching the clock right now working as an entrepreneur and you know understanding that you Want to enjoy and not hoard it right because what if you're not here tomorrow? However, what if you are here tomorrow and you have something happen? So really exploring that saving it's not just hoarding What I? challenge you. If this is you thinking this, you need to do, give your savings a purpose. And that leaves us right into our next portion of the episode of it's important to understand the, your purpose of saving, right? So one family, one couple, one individual may not be saving for the same exact things as another. And that is the way that money works. Money is not in a box. It's not in an outline, you know, and even as a financial coach giving you guidance around what you want to save for or should save for is definitely not my approach. Um, so how do I approach this and how do I help you today? Number one, savings can provide you with protection. safety and security. It is not just setting money aside. I know sometimes having just that vague thing of, I'm supposed to have a savings, so I'm trying to have a savings, leaves a lot of ambiguity with it. It's a struggle. You don't know why you're doing this and so therefore it is so hard to continue to do that. And then when something exciting comes around you think, I've got that savings there, I'll just spend that because you have not denoted, you know, anything for that. It's not got its purpose yet. I experienced the same feeling, right, the same struggle when I was on my journey and trying to. you know, trying to save for emergency fund. The thing out there is still out there. Um, I struggle with it. Um, and maybe if you are as well, you will identify with this, but it was always saved three to six months of your expenses due to job loss. Just in case I worked in a job that 99 percent sure I was not going to lose my job. So it was really hard for me to just stick this money there because the other part of that was when do I dip in there? I've set it aside for emergencies, but what about all of these other things? What about when my car breaks down? What about when my furnace goes out? Can I use it for that? But I'm still, I'm just saving for job loss. So hopefully that kind of helps you understand the importance of creating that purpose. So now first off, right, protection, safety, and security. I want, I'm gonna, you know, have you decide. Here, what is protection to you? What do you want to be protected from? What will help you feel safe and secure with your money, with your savings? Define it out. You know, get exploring all of those different, uh, situations that could happen. Think about your life. If you don't, you know, if you live in a big city and you don't have a car, you're not going to plan for car repairs or a car breakdown or a car replacement either. You know, think through all of those things of, What do you have every day that if you didn't have would cause you a little bit of grief? And so having that savings can support you with just having that safety there. Knowing that if something happens, you can cover it. You can take care of yourself. You don't have to get crafty in how you're trying to put together the solution to your current problem. So it doesn't stop there. Savings can also help us achieve financial goals. That summer vacation that you want to go on, that Christmas cruise, the, you know, whatever it is. You want to upgrade your backyard because summer weather's coming, you need to have a home remodel. Savings will help you achieve those goals. It just supports us, it makes us feel good, and it makes us feel happy. So, it's not just about creating the emergency funds, right? It's not just worrying about potential life events. It's also creating, what excitement do I want to spend with my money? That right there, I think can negate that Saving is hoarding if you have defined what you want to spend it on. Think about both of those areas. Think about your savings. Are you able to, you know, do those? So moving into the action steps portion, I know I've given you some of them first, but action step number one, I want you to think what is holding you back from saving. We talked about a couple of misconceptions, so I want you to explore this question if neither one of those resonated with you. Ask yourself, Why do I struggle to save? Be honest, explore that. If you are a journaler, you know, go journal. If not, just spend some time thinking about why do I struggle to save? And the action step is to solve this challenge first. Some other common obstacles may be the lack of definition around your savings. The idea that you don't have enough money. We've already talked about that. Make sure you get clarity on that. Make sure you dive into your numbers and actually determine that. It may be the case but my best guess is that it is not. The last obstacle could be your level of debt may be limiting your ability to save. If this is a struggle of yours, focus on how you can create a debt plan. Check out my debt freebie in the notes and download that to help walk you through. It gives you guidance. It gives you checklists. It gives you additional support through previous podcast episodes in how to create your own debt payoff plan. Making sure that gets in there and is supported. And then curating the ability to Save as well as pay off debt is another way to explore and tackle that. All right, action step number two, define your purpose or your purposes for saving. So we talked about emergencies, emergencies, things that will provide you safety. support and security. I know when my furnace went out in the winter, I was grateful I could call on the heating guy, heating and air guy, right, to come and fix that. And knowing that I had the support of that savings to create a safe place again, to be able to reach into that. So think about those different situations. What if something happened with your current safe Oasis today, how would you be able to, you know, to fund that? Create the purpose. Start saving for that. Even if you're only able to save a thousand of what would be a 5, 000 expense, you're a thousand dollars further ahead than you were. So recognizing it's not about all or nothing. It's about the baby steps. It's about making sure you're getting movement. And don't forget to also define your purposes for saving for fun. What are your financial goals? What do you hope to accomplish on the flip side for working hard? Are you going to, you know, go on that summer vacation, that Christmas cruise? What is it that you, your heart desires, that new remodel of your house? You want to upgrade your kitchen and get nice new counters, floors, all of the things, whatever it is. Define that and that will help support you and being able to set money aside for that. Right? Seeing it grow and going, Oh my gosh, it's almost there. And then I get to relish in that freedom of being able to, to buy something that I really, really want. All right. That is the end of today's episode. Stay tuned. Next week, I will be sharing about where you should be putting that money, right? We are defining it. We're getting our purpose. We're making that clear. And then you're thinking, okay, where do I put it? I'm going to share all of the possible savings accounts, best case scenarios, and then you get to choose. So as I wrap up today's episode, I just wanted to take a moment to thank each and every one of you for listening. Your support means everything to me, everything to me. If you have a spare minute, I'd love it if you could leave me a review on Apple Podcasts, This feedback and review helps me improve and also helps other listeners like you get the support that they need as well. Till next time, have a wonderful week. Hey Gen Xer, imagine a life where you control your money instead of it controlling you. Financial coaching can help you learn the basics of budgeting and saving so that you can live a life without debt, have your money work for you, secure your retirement, and build a legacy for your loved ones. Let's face it, spending hours of your time trying to figure out where your money went is not serving you well. I promise you, you don't have to keep dipping into your savings every month to pay those unexpected bills and expenses. What you really need to do is head to my show notes and book a free budget Q& A call so you're no longer burnt out from your budgeting intents and instead you'll be saving yourself time, money, and tears. And because you're part of my podcast family, when you book a free call with me and mention Wealthy After 40, you'll get a special 50 to 100 discount for my financial freedom jumpstart intensives, respectively. Head to the show notes to book that call and enjoy the rest of the episode. Thanks for listening.