|Interview: Jean Chatzky
|Page | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
Those living paycheck to paycheck may feel that they
don't have any money leftover that they could set
aside. How can they get started?
trick is to reverse the process. People think that
they don't have any money leftover that they can save.
You have to save first and then work with whatever
you have left to live. So, the savings process has
to begin when you get the paycheck. That's when you
set up the automatic transfer that moves a bit of
money from your checking account to your savings account
and gets it out of the way of your fingers, where
you're likely to spend it.
The first month when you have moved
that $50 that you ordinarily would have in your spending
account may be a little bit difficult. But the next
time you do it with that second paycheck, it's not
going to be as tough, and by the third time around,
you may feel inspired to make the initial transfer
a little bit fatter. If you think about it in reverse,
every time you get a raise, it feels like you've got
a whole bunch of extra money. That feeling only lasts
for one or two paychecks, however, and then you start
wondering how you ever lived on less. You're just
reversing that process.
The same advice applies toward taking the extra money from raises.
absolutely. Well, that's easy. What stands in the
way is that people feel like they deserve some sort
of a splurge from that raise. My feeling is OK, give
yourself some sort of small splurge, but don't go
through all of it, don't blow your chance at a real
“Don't blow your chance at a real safety net.”
But isn't there another barrier to the savings strategy
-- people don't want to feel deprived by denying themselves
may be disappointed when they don't get one of those
everyday pleasures or extra pleasures. But guess what,
research has shown that that disappointment doesn't
last as long as we think it will. We have -- and I'm
citing research that comes from Dan Gilbert out of
Harvard -- immune systems in our psyches, much like
we have immune systems in our bodies. And when we
are disappointed, either because some guy breaks up
with us, or because we have to drink a regular coffee
and not a double decaf mochaccino -- we get over it
very, very quickly.