A few years ago, I consolidated almost all of my credit debt. Since then, I've been steadily working my way out of debt and working toward getting my financial life on track.
Now, with things most of the way paid down and everything under control, I have started to think about a word I usually dread: SAVINGS. I've been realigning my priorities with money and what I really want lately, and this has included realizing that I don't need nearly as much stuff as I previously believed to keep myself happy. What I do need is less stress, some stability, and a focused drive to improve my life. At one point, every extra dollar went to paying down my high-interest-rate credit cards, and I've eliminated all but two accounts: one business account that acquires miles and one personal account to a favorite clothing company. I'm currently in the process of paying those accounts down from almost-maxed to within 10% of their balances.
With all this money going to correct purchasing mistakes from my past, and the rest going to support my business, I wonder how I ever have any money at all. But then I look around and realize how much money I spend on superfluous things, such as some new craft kit or a new ball of yarn that I just had to have when I haven't gone through hardly any of what I got the time before, or even the occasional hundred-dollar stack of books I walk in the door with. I decided that I had to stop telling myself "I don't have enough money to put into savings."
I started a few months back with a monthly account transfer into 2 accounts: my shared savings with my husband and my smaller, personal savings account. I figured if I had an automatic transfer, I'd kind of set it and forget it, and just notice that ok, 25 has gone here and 10 has gone here. I've been working off that method for a while, and I'm never put back by the small amounts of money leaving my account at 2 different points during the month.
Then, I started thinking. At the very, very least, I make $10 an hour at work. Usually more, but at the very least, $10. I thought, why do I not think my future and finances are important enough for me to invest what equates to usually less than 1 hour a week of my time and money? I needed to give at least $10 extra a week to myself to put aside for either emergencies, or for whatever future plans require - college funds, maternity leave (ahem, eventually) or vacations my husband and I want to take together.
However, since my industry is a per-customer situation, my income is not always consistent from week to week, so a certain amount per month on a certain date other than my prerequisite phone bill or credit payments always makes me nervous. I decided to see if I could trick myself into not noticing myself saving money by doing smaller increments, but a lot more frequently. And when I say small, I mean small.
I decided that I'd add a couple more transfers to the list. One day a week, 3 dollars comes out of my account and goes into my personal savings account. Originally I was hoping to set up a $5-a-week payment to my credit card, but I wasn't able to set that up. That's when I decided that I'd save the whole $10 a week I was thinking about originally, and just make an outside effort to pay my cards down instead of buying unnecessary items in 2011. Instead of changing my 3 dollar transfer to $10, or adding another transfer day, I decided to break up the remaining 7 dollars, and transfer $1.40 every business day to my account.
This way, 5 days a week, I'm paying myself $1.40. 1 day a week, an additional transfer of $3 goes to the same savings account. 1 day a month, an additional transfer of $10 goes to that same account. And finally, 1 day a month, $25 goes into my shared account with my husband.
With less than 2 dollars a day coming out of my account, I don't have to stress whether or not my savings transfer is going to threaten my account into overdrafting, and I'm already used to the higher two amounts from coming out of my account.
I know it doesn't sound like much, but with this system, I'll be bringing my savings from what was before $420 a year, to a total savings of $940. And hopefully, I'll barely even notice.