A New and Improved Savings Plan

We often hear about the importance of saving. Saving for emergencies. Saving for college. Saving for retirement.Blah blah blah…Sometimes it may feel like you’re a kid again, with mom and dad nagging you to be on your best behavior. You know the advice is good but do you often feel like you just want to ignore it?That’s actually an expected and natural response, rooted in the way our brains are hardwired. When we act from a fear-based, reprimanding place, it stimulates our flight-fight response in the brain and causes us to want to rebel, even when rationally we know the new behavior might be better for us (in this case, to save for a rainy or future day).

So today I decided to do something different. Instead of getting you to save for some goal that’s scary or very distant, why not save for something fun? 

Something delicious.

Something indulgent.

Because money is supposed to flow. It is not supposed to stay stagnant, like the murky waters of a pond, or reserved only for benefits that you’re not going to reap for another 15, 20, 25 years from now. It is supposed to flow in and out, through both saving AND spending. (It is called cash flow, after all).

While it’s incredibly important to, yes, save for emergency, college, retirement and any other goals you have for protection or long-term survival, it’s also incredibly important to spend your dollars once in awhile on shorter-term goals– that are pleasurable and not always so practical.  

And it’s even better when you are mindful about what those goals are and have a plan for working toward them– rather than what we often do which is to spend in a knee-jerk kind of way when we are feeling tired, lonely, bored, or bad about ourselves.

I love how one of my business colleagues put it once: We shouldn’t just save for a rainy day; we should save for a sunny day. 

Depending on your own financial picture, your “sunny day” could be as small as saving enough so you can treat yourself to a week’s worth of tall skinny vanilla lattes at Starbucks (approximately $17.50) or as big as a “livin’ large” new kitchen or safari trip ($20,000+). My own is a five-day rafting/camping adventure with my family on the Salmon River in Idaho.

Full-disclosure here. I am NOT suggesting that these goals REPLACE the others (I can see Suze Orman just about having a heart attack at the mere possibility).

What I am saying is that adding a few short-term goals in the mix—even if they are as small as the occasional vanilla latte- may be more beneficial than you think. It may relax that flight-fight response a bit, allow you to enjoy some of your earnings, and may even motivate you to earn more, thus helping not only your ability to save short-term but long-term as well. 

To this end, you may want to check out a site called SmartyPig, which helps you to earmark some of your savings toward a specific goal (rafting, anyone?), so you know how close you are toward reaching it (rather than having all your savings in one catch-all account with little understanding of how they will be allocated).  But you also can easily open up another account at your current bank that is solely for that one short-term goal, or track different savings “buckets” using a simple spreadsheet.

So save away! For emergency, for college, for retirement…AND everything else in between.

Post below how YOU want to save up for. I’d love to hear…