The Save Money Mindset and How We Did It
BY BRANDON VAGNER, CPA, Ph.D., & WALLET WIT FOUNDER
Learning how to save money is one of the hardest things for people to do, and it’s absolutely devastating a lot of people nearing retirement age. It’s no secret there are a lot of factors at play, but nobody can deny that a significant portion of people overspend and never start stashing money away. So, what’s the key you might ask? Well, I’m going to tell you how my wife and I really kicked our savings rate in gear.
My wife and I had a difficult time saving straight out of college, but that was because we didn’t have a money saving system or mindset in place as soon as we started our careers. A saving system such as the Digital Cash Envelope System is huge for your saving success, but a system can be overridden at any time without the right mindset. There is a single underlining concept that (1) gets people to start saving and (2) keeps them on a path of saving. That underlining concept is mindset.
How my wife and I are able to save money at an incredible rate
(1) We play the long game (save money now to realize the benefit later)
For those that are regular Wallet Wit blog readers, you know that my wife and I are fairly young (early 30’s) educators and business owners. We are a couple of extremely hard working St. Louis Cardinal fans (Don’t hold that against us) who believe in working your tail off for financial security.
I’ve been driving the same car for 10 years (how many personal finance bloggers can say that?) and we still have a couch I bought off my college roomate for $50. I’ll admit that I’ve wanted a truck for years and my wife has wanted to replace that couch for even longer, but we’re playing the long game. That long game is called a debt free and financially secure life.
Even though our car and couch are not worth anything, there is nothing wrong with them aside from the fact that they are not new. So, why would we need to replace them?
I talk to people all the time who are in extreme debt, but somehow just went out and purchased a $1,500 couch or a $30,000 car. Those people don’t have the long game mindset, and will unfortunately be in debt until they develop one. They have to begin to strategize their way out of debt and realize that taking on additional debt is only scratching a very expensive itch. It’s simply a short term fix.
To play the long game, you have to truly believe in the benefit of the long game.
(2) We don’t give in to temptations
You can want to play the long game all you want, but the truth is that many people who commit to it, just can’t get over their short term wants and desires.
There was a point in our lives where we would snap purchase all types of things. By far, the worst temptation we had was going out to eat. It always felt so good to have that nice meal out, but it definitely was not the same nice feeling on our financial savings.
You can’t win the long game if you’re constantly falling victim to short term temptations. You have to learn how to say “no” to yourself. Nobody else will, and typically you’ll find that people will encourage your bad behavior. That’s because they are most likely broke too.
(3) We work hard, but play hard for free
We both work crazy hard, BUT we love to play hard. The kicker is that we have found that we absolutely love doing things that don’t cost a thing.
We love getting outdoors to go on hikes, bike rides, runs, etc. We just can’t get enough of doing things out in nature. When we lived in St Louis we went to a place almost everyday that is a slice of heaven on earth. Creve Coeur lake has a bike / running trail that is about 4 miles around the lake. 1.5 miles of that is a beach that always attracts kayakers, wind surfers, and more. The rest of the trail is through woods that runs right next to the lake and is just incredible. There are tons of people out there everyday and you can just feed off all the energy from others. Even more, there are bike / running trails that spider out from the lake and I could actually ride my bike to Creve Coeur lake from our house that was about 5 miles away. See if there is something like this in your community.
Also, we really like volunteering our time with local organizations. That to us is a blast and we meet a lot of great people through that.
Lastly, I can’t forget about bocce ball. That’s one of our new favorite things to do on Tuesday nights. A word to the wise….Watch out for the elderly when it comes to bocce ball. They will kick your butt.
To save money, it’s critical to start looking for fun free activities you can do.
(4) We could care less what people think
So, you might be reading this and are saying to yourself that you don’t care what people think, but really sit back and be honest with yourself. Is that entirely true?
When we were younger, both my wife and I struggled with the fact that we didn’t want to look like we were cheap or that we didn’t want to go out. That said, we were constantly agreeing to go out with different groups of friends and were constantly incurring costs associated with it. We just couldn’t say no, because we wanted to maintain all those friendships.
Once we finally stopped caring what people thought, it was a game changer for us. For example, we just went on a trip with some really close friends who have an entirely different mindset when it comes to money. One night at dinner, they ordered a $90 bottle of wine and they thought we would follow suit and order one as well. If my wife and I hadn’t changed our mindset, we probably would have ordered that $90 bottle of wine too. We didn’t though, and our friends could have cared less. They were just thinking about their wine.
Just so there is no confusion, we have a “fun budget” every month that allows us to have plenty of fun. Our friends know that, but they also know that we won’t go crazy and go over budget. We never make a big deal out of it, and our friendships are still strong as ever.
(5) We see the forest through the trees
It’s very easy to get caught up in the daily grind and not take a step back to look at the big picture of things. You might constantly feel like you’re just living month to month and there is no room for any changes. If that is you, I’d encourage you to think about where you want to be financially in 5 years, 15 years, and 30 years down the road.
Really step back and begin to strategize your finances so that your money can start working for you. Having a money saving mindset is one thing, but for some people they have to begin thinking about ways to increase their income.
There are a lot of personal finance folks that just want to focus on the saving side of things. Yes, it’s massive, but if you really want to start making progress, then you should start thinking about ways to raise that income.
I get it that it’s tough to make career changes and start a business, but one thing everybody should consider is starting their own blog/website. More than likely, you have a voice the world would like to hear. You would be amazed at how many people are making their dreams come true by simply starting to write online and slowly building an audience. I wrote an in-depth article on how to start a blog if you think you might want to.
Your mindset has an incredible amount to do with your financial success and the ability to save money. Start thinking long term and forget about all the small things your mind is telling you to buy. The odds are that you don’t need them. The next time you go to buy something, pause and ask yourself if you truly need it. Start training your mind to say no, and you’ll be shocked at the power it has.
Best of luck to all my loyal Wallet Wit readers! I’m excited to hear all your success stories in the future. Please come back and share them with us.
Let us know what you think in the comments. We love to get your thoughts.