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When You Can’t Afford to Save

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As someone who spent the bulk of my career in a financial planning capacity, you will never hear me say that “it’s okay” not to have savings. A cash cushion—ideally of 3-6 months expenses—makes life immensely easier.

However, outside of my profession, I’m a person, I’ve been there, and I get it.

Many of us start careers already in the financial hole due to student loan debt. We move to big cities in search of high prestige, often low-pay jobs hoping that a few years of paying our dues will pay off big. We cram roommates into tiny apartments, eat ramen noodles, walk instead of ride the subway, and pay for dinner at vending machines. If our lives look glamorous on social media it’s only because we know how to spot a bargain for a night out. Free wine at art galleries, for example.

We eagerly read articles about savings hoping for some tip that we missed and find that much of the advice is tone-deaf. “Skip dry-cleaning! Get a monthly manicure instead of weekly! Eat out only once a week!” Please, sometimes I’m thrilled if I have enough quarters to do a load of laundry.

So, how do you get ahead of the savings game?

Be Honest About Your Spending

Spend a month studying where your money goes. You should have a sense of your financial obligations already: rent, utilities, debt, phone, Internet. Where is the rest of your money going and is there a way to cut back? Be brutal with yourself here. Are you cabbing to work because you sleep in? Indulging a bit too much at the bar? Buying groceries that rot before you eat them? Have a magazine addiction?

Identify the behaviors that are getting you in trouble and see if they’re justified. Maybe your $10/month magazine addiction keeps you from splurging on clothes. Or, you take cabs at night because you get overtime pay and walking home isn’t safe after a certain hour. The key is to know and own where your money is going and cut what you can.

Live Within Your Means

Do you know how much you take home a month? Now that you know how much you’ve been spending, make sure that your take-home pay is higher (or at the very least, equal to) what you spend. This is a baby step to financial stability—remember, you actually want to be saving money, but the importance of staying out of debt should not be understated. If you come to the end of the month in the red, scrutinize the pennies you spend. If you break even, keep up the streak. If you have extra, congratulations, you’re on your way!

Spotting Extra Cash

Maybe you get a bonus, birthday checks from family members, or you have a side hustle that kicks a few dollars your way. Start your emergency account with any extra money you get. Open this account in a separate bank from your checking account and hide your debit card from yourself. If you have some buffer in your salary, send $25 (or more!) to this account weekly. Yes, it will take awhile for this account to have the recommended 3-6 months stored away, but you will be saving something.

Be Drastic

Sometimes the money just isn’t there. If you find yourself still coming up short, go a little bit deeper when studying your cash flow. Is there anything you can do to change your situation? Bring in another roommate? Live with family for a few months? Take another job?

Don’t Give Up On Yourself

Not having savings doesn’t make you a bad person or inherently irresponsible. Few people are living the life they project on social media and many young people are struggling. Acknowledge this fact but don’t let it be an excuse for making poor decisions. Realizing that many people are struggling will make it easier for you to be honest with yourself and with friends and family about your capacity.

Stay focused, stay in charge, and you’ll find your way to financial success—even if it’s a little bumpy.

Photo: Thinkstock

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