I chose April to share some tips on how to build better relationships with your money because of the famous "April showers" - in Romania rain is a sign of prosperity because it brings life to the land. So this seemed the perfect time to share some money lessons that I learned throughout my life, by living in 2 different countries, through communism, then democracy and then a different kind of democracy.
While you read my tips and tricks, please take into account that they were developed based on my personal experiences, and the reason why they worked for me comes down to my feelings and ideas about money. You may not share those same feelings, and that is OK. Take it all in, and then adapt it to your own money story, to based on your own feelings about money.
Saving...? Yes, please!
The reason why most people don’t save is because they decide to save the money they have left after paying the bills and spending on both needs and wants. Most months, they don’t have anything left after spending on things they want – even though sometimes they mask wants as needs. The cliche about "running out of money before one runs out of month" rings true for a lot of people, unfortunately. In this case, even the best intentions are not powerful enough to turn into action.
Most financial gurus will advise to “pay yourself first” and put 10% of the money you get paid into savings before directing money towards anything else; and then live on the rest, to cover both needs and wants. They are correct in explaining that everyone saving by this method will figure out ways for the money to be enough. One hurdle in applying this method is the fact that sometimes people are intimidated by the 10% amount - it sounds scary and then leads to analysis paralysis while people try to talk themselves into it. So, for most people, it may be a better idea to start with a lower amount than 10%, and then increase it every couple of month while getting used to less money available every month.
Depending on how you get the income, you can have an automatic deposit straight from the paycheck, or an automatic transfer from the checking account on preset days. If you get commissions you may consider a percentage of income; whereas, if you get a fixed salary, you may want to designate a set amount. If you are an entrepreneur or an independent contractor and rely solely on commission, it is easier to set up the transfer the day after the commission gets deposited into your account - or better yet, see if your company can direct deposit a certain percentage to another bank account.
The number one thing to remember is that saving takes discipline and you need to build up your discipline muscle if you depend on yourself, and not an employer that forces your saving into a retirement plan, for example.
The strategies that always worked for me were to have a savings account at a bank a little out of the way, where I don’t go very often, or to use an online bank – again one that I don’t use on a regular basis. The one trick that has always helped me to keep the money in savings, is to not look at the money too often. Out of sight, out of mind concept at its best!