When you asked me earlier why people think it's so tough to save, and I replied that I didn't see it as difficult, it's because I started saving early. Since I began before I got married, I was already in the habit. If you don't see it, you don't spend it. If it did make it to my account I would get a manicure, a spa day or buy things for my friends. I don't see saving for retirement as garnishing my wages. We live in that mode. The earlier you start, the easier it will be to become disciplined. But the caveat is, it's never too late to start. Take small steps. Realize that even if I save this amount which is less than a million dollars, maybe I can at least transition into a job where I can work less hours.
|Guidelines for couples|
Staying on track
I absolutely loved the un-budget --the 60/40 rule-- you described earlier and in your book. Is that what you follow?
I try, I have to say I try. I wrote this so people will have a guideline as things come up. You can't always do the right thing all the time, so when you have to backpedal a little bit, realize that you're doing it and get back on track.
You're not alone
What was the most helpful thing to you personally that you discovered in the course of your research?
One of the most helpful things, and it's kind of sad, is to know that a lot of us are in the same boat. To know that we're not alone in feeling stressed out financially, and that we need someone to help guide us through handling relationship issues as well as discovering smart financial decisions. These are all the steps I walk through in the book, really. It was an eye-opener for me that there are a lot of couples who are interested in living richly ever after but need a plan. Once we put our goals and plan on paper, it relieves any tension. Now when we realize the goals and find ourselves backpedaling, we know where to go back to in order to reach the objectives we set out.
Strategies for success
Do you have any parting words of wisdom for someone setting out to build an emergency fund?
Just like you do with your 401(k), you can set your emergency fund on autopilot and have money direct deposited. Limit the amount of credit cards that you have. I say never have more than two. I like amassing points and feeling like I'm getting something for free, but unless you can pay it off every month, getting rid of the cards and putting money into an emergency fund is more rewarding.
I think a lot of people need to involve the entire family in the emergency fund. If an older child has a part-time job, have them contribute or set up a fund for themselves. If you have kids who are getting an allowance, teach them to save from it. Talk about money. Your financial habits will go a long way in getting them to do the same.