Why your savings plan doesn’t work

I was at a friend’s house recently and saw one of those printable saving plans taped to her fridge. You know, the ones that are all over Pinterest. And since I don’t adhere to any social etiquette that says you shouldn’t talk about money, I asked her how it was going?

“It was great until week 5. Then I couldn’t afford it.”

That’s it. She made it to week 5 and then gave up completely because there was no way she could afford to put more than $10 a week into her savings account. Following the savings plan would have killed her budget. ‘Put a little in each week and soon it will be a habit to build up to more’ is a nice thought, until you hit your threshold. That is very discouraging to someone who is trying to get started putting money into a savings account.

How much you save is not a set amount.

Each person’s amount is different, and that’s okay. Make a budget, before anything else, to find your savings threshold. Take that amount and have it automatically go into a savings account. Don’t handle it, have it automatically deposited in there. The less you see of it, the less you will remember it until you need it.

Go with what you know.

Every heard of the tortoise and the hare? The hare ran and ran, until he burned himself out, then sat back and took it easy (spoiler alert: he lost). Instead of building up to an amount with weekly increments, start with the amount you know you can save. 95% of my paycheck goes to pay for daycare, but that other 5% immediately and automatically goes into savings. I don’t touch it, just straight to the savings account. It’s not $100 a week like some of the savings plans are telling you to save, but that $60 a month is steady and is already planned into my budget. I don’t get a chance to justify it going somewhere else, it is savings. End of story.

Slow and steady wins the race.

Remember the tortoise and the hare? Pretty soon that $50 you can afford each paycheck builds into $1200 at the end of the year. Sure, it’s not the $3k that some savings plan promises, but this is real life. I sure can’t afford $100 a week like some of the savings plans build into (or even $50 a week), but that $30 each paycheck is doable for me, and that’s all I expect. When that emergency happens, I have that steady $60 a month to fall back on, no matter what.

What is your favorite way of saving? Are you slow and steady, or a build up to top speed kind of person?