How To Start Saving For That Next Big Purchase After School
There’s a lot to know when it comes to managing your finances, and for most of us, this process of “adulting” after graduation is akin to trial by fire. That was certainly true for me, as shortly after my graduation I found myself in possession of a large sum of cash courtesy of the new job I had just started.
After graduation, I came up with a few goals. All of which required money. Getting a new car, moving into my own place and purchasing furniture were all on my short list, but it soon became very clear that I wouldn’t be able to actualize any of these things unless I got a handle on my finances.
I knew I’d have to make a change, trading in my frivolous spending and adopting a more frugal and restrained approach to money management. But I didn’t know the first thing about shifting my lifestyle. So I dug deep, scouring the web for practical, quick tips that would help me get serious about my money.
My savings journey has been far from easy and I’m only about 75% of the way to my ultimate goal. But the things I’ve learned not only about myself, but also financial freedom and the physical act of saving far transcend the personal value I’ve derived from this experience.
Here’s a few of the things I’ve learned.
1. Remember saving is a lifestyle change is not a life change
Coming out of school, I heard it all. “You’re going to have to stop going out and spending all your money on food.” “I’m telling you. If you keep shopping at those fancy stores, you’re gonna find yourself in a world of debt. What do you need all those clothes for anyway?” “Your credit card is going to get you in some trouble, just wait.”
So many people chimed in with their two cents that by the time I had received an earful from family members, family friends and even family friends’ friends, I felt like a millionaire. I wasn’t naive. I knew that I was going to need to make some changes if I wanted to accomplish any of what I set out to do. I just didn’t think that doing so would mean forsaking every previous pleasure and amenity in my life, and living a modest lifestyle.
Plot twist: it doesn’t. Initially, I followed every piece of advice I was given. Giving up my weekly milkshake runs for a lonesome tub of Breyers ice cream. Quitting shopping and mall visits altogether. Even setting my credit card aside indefinitely. And for a while, I was fine.
Once I had eliminated the distractions, I found myself more focused and ready to tackle my goals. Hungry for the promise of release that reaching my savings goals would bring. This was my first mistake.
I realized that I was thinking about saving the wrong way. I had chosen to go “cold turkey,” cutting off all of my extra curricular expenses at once, and thought that by doing so my impulse to buy would just disappear. Like if I put away the match then there’d never be a fire.
What I didn’t realize then was that though I had stopped making impetuous purchases and indulging in things I didn’t need, my desire to do precisely this remained strong as ever. I had come up with a solution for my compulsive spending yes, but the solution I’d created wasn’t sustainable. I was OK with spending for now, but if I was going to reach my goals, I’d have to go back to the drawing board.
When most of us begin saving, we do so with an end goal in mind like a car, or some other accessory. We make assertions about what we’ll need to get there, saying things like “I have to be disciplined,” or “I just have to buckle down” when we begin on our journey.
But if you’re looking to save more money, that doesn’t necessarily mean abandoning your current lifestyle in favor of a more frugal, affordable one. Yes, in order to save more you’ll likely have to make some concessions, but you should be adopting financial habits that you can maintain. If you know you’ve got a sweet tooth, don’t say you’re giving up cookies for good. Say you’re cutting back on chocolate chip cookies or that you’re only eating sweets on special occasions. Come up with goals you can actually stick to, and remember that though it will take discipline and a significant amount of effort to save money, you don’t have to completely abandon your lifestyle to do so.
2. Celebrate progress with “detours”
So this next tip can be a bit…unconventional, but I think it’s an important one to mention nonetheless. Somewhere on your saving journey, you may find yourself with tunnel vision, focused only on your end result and oblivious to any outside influences.
When this happens, don’t be scared, having tunnel vision when it comes to saving is a good thing. In fact it’s a great one, as it means you’ve been able to successfully reframe your mind and enter “the zone.”
You should stay in this zone for as long as you can before something (and it almost certainly will) distracts you. It could be the unveil of a new pair of shoes that catches your eye, or maybe it’s when the iPad you’ve been looking at for a couple of months goes on sale. Regardless, there will be something that draws you out of trance.
Now, when this happens there are two things you can do. One, you simply ignore these impulses. You stick to your morals and choose not to unburden yourself by indulging in whatever new toy has caught your eye. Or two, you take a closer look at this new distraction, consider why it interested you in the first place. And maybe, just maybe, you buy it.
I know, I know. What I’ve just said is blasphemous and could very well lead to my perdition. But hear me out. When you’re neck deep in your saving journey, you may find yourself experiencing fatigue or begin to think of your best efforts as futile.
Committing to a long term investment in yourself can be difficult, and sometimes you need to do something drastic to remind yourself why you began saving in the first place. And making an impulsive purchase can be just the thing to wake you up.
For me, my impulsive purchase was a dog. I was three months into my savings journey when I started to feel restless. That, despite my best efforts, I was no closer to achieving my goals than I was when I first started. I needed to feel that I actually had accomplished some semblance of wealth these last few months and earned a modicum of status. So what do “wealthy” people do? Well, they buy a dog of course.
Let me backtrack. Though I’m labeling my decision to purchase a dog as an “impulsive purchase,” this is a bit of a misnomer. I’ve always wanted a dog, and did extensive research into various breeds and breeders before making my decision. Still, my purchase was impulsive, as I wasn’t necessarily planning to become a dog dad this year.
I digress, but the important takeaway here is that purchases like this can be just the thing you need to refocus your energy and re-invest in saving money. If your purchase is big enough, it’s likely that you might have dipped into your savings to make it. Once you’ve taken money from your savings even if it’s an infinitesimal amount, chances of you taking money from the account again are slim.
When you make an impulse purchase you’re essentially shocking yourself into submission and back on track to saving money. You won’t exactly regret buying whatever it is you just got, but you certainly won’t want to dip into your savings again until it’s time.
3. Actually use your budgeting apps
This last tip comes courtesy of all of the countless financial gurus and young millennials whose videos I’ve watched during this journey. Download a budgeting app, then use it.
There are so many money management apps out there. From Mint to Personal Capital and Acorns; each has their own interface and features to make saving and money management easy. It’s important to do your research before deciding on what budgeting app you’ll use, and be weary of possible app scams out there when deciding on your new money management tool. But remember that these apps can be literal game changers if used correctly.
Wait. Let me hop off my soapbox and explain with an anecdote.
I downloaded the app I currently use, Mint, back in March 2020, around the same time I got serious about saving. With Mint, I was able to keep track of my credit score, upcoming bills and my general cash flow at any given time. Typically, I’d have to sign onto my bank’s personal banking hub and then head over to Equifax or Credit Karma to see where I was credit wise.
But with Mint, everything was aggregated in a user friendly format that was digestible and clear cut, allowing me to get a better idea of how I was doing financially at any given time. What’s more, shortly after my signup, the service began sending me daily personalized emails that kept me abreast of how my money was doing along with a few helpful statistics and graphs.
Financial apps aren’t the most interesting things in the world. In fact, there are times when checking my Mint can exacerbate the feelings of monotony I sometimes associate with money management. However, I still make it a point to use Mint frequently, if only to remind myself of all the progress I’ve made and what’s left to come.
Saving is hard. It’s certainly not for the weak minded and a difficult ask for the strong willed. But it’s especially difficult for those just entering the realm of adulthood and coming straight out of school. Fortunately, there are ways to make saving money easier. Quick and practical methods that will help you stay on the straight and narrow and reach your goals with ease.
I can’t promise that if you follow my tips you’ll reach your goals quicker, or that you’ll run into fewer roadblocks, or any of that. But what I can promise, is that if you use the suggestions listed, and stick with a sustainable plan to meet your goals, you’ll be well on your way to success.