There is a story that’s become legend in our family: it’s about the day we took money from our baby’s piggy bank to buy groceries.
We had just moved halfway across the country from Illinois to Colorado. Our first son was just a toddler. I was primarily a stay-at-home mom, doing some freelance work on the side; my husband taught music to middle school kids in a small town situated in the shadow of the Rocky Mountains.
We didn’t have much. How could we? We’d only been married a couple years. We were still chipping away at our college debt, and we had just spent what little savings we had to move to a new city, to a new apartment: two months’ rent due up front, thank you very much.
One night, when the fridge was virtually empty and payday was still days away, we made the decision to break into our baby’s piggy bank. We grabbed a few dollars to buy milk and potatoes.
I felt deep embarrassment that night. What kind of parents were we? We couldn’t even afford potatoes for our child?
It comes as no surprise to me that, according to a survey from OnePoll on behalf of AmeriLife, 7 out of 10 Americans live from paycheck to paycheck. I believe it, because that was us for a good many years. The crushing weight of education costs, bills, low-paying starter jobs, and child-rearing kept us from gaining any financial traction. We were fortunate to have families that we knew would help out if we got into a bind, but we wanted to be self-sufficient. We knew that one car repair or hospital bill could sink us.
We tell this story to our children to say: keep at it. There are no get-rich-quick schemes. Work your way up at your job, live as simply as you can, and Don’t. Give. Up. Eventually, with some effort and luck, you can get to the point where your paycheck covers more than just your expenses. If you’re willing to put off costly vacations or a new car, you might actually start to see a little nest egg beginning to form in your savings account.
By our 30s, we paid off our school loans. Then, in our 40s, we sold our home and traded it for a much smaller one with a much smaller mortgage payment. For the first time, the financial gods began to smile upon us. Still, we noticed how easy it was, with one swipe of the debit card or one click of the mouse, to nibble away at our savings without even realizing it. So, we devised a game to keep us from so easily dipping into our reserves, because the temptation was too great.
The game? Prepare an obstacle course to spending. Squirrel away what you can. Then, make it inconvenient to get to it. Forget about it if you can.
If you find yourself eyeing a loved one’s piggy bank, consider playing along!
1. Ready, Set …
Establish a savings account. This account must be at a different bank than your primary account from where you typically spend.
2. Channel your funds
Make a monthly budget, then designate a portion of your paycheck to be directly deposited into your savings account. You won’t even see the money —— I like to think that my money takes a direct flight to a warm tropical island, where it vacations; it’s resting up so it’s ready to go when we have an emergency car repair, or a medical bill.
3. Go analog
You know all those nifty apps and features that banks have to make it easy to access (and spend) your money? Don’t use any of them for this savings account. No online banking allowed! If you need to know how much money you have before your quarterly statement comes, get in the car, drive to the bank, and ask the teller to look it up for you. This is a very uncomfortable and inconvenient thing to do, which is why you will avoid doing this except when absolutely necessary. (Yep. An obstacle. These are the rules.)
4. Leave it alone
Let your nest egg grow. Sleep easy knowing that it’s there when you need it. But only for emergencies —— not a hot tub or some fabulous new shoes.
Those first few years after starting out were tough. We worried a lot. We felt defeated sometimes. We leaned on each other when it felt too hard. Living month-to-month was a source of great stress and sleeplessness. I wonder if we would’ve felt less alone had we known that 7 out of 10 Americans were in the same boat? But it wasn’t all bad. We learned to shop the sales —— and thrift stores. We developed an appreciation for parks, picnics, libraries, and game nights at home.
In the rearview mirror, our paycheck-to-paycheck days serve as a mile marker, to show how far we’ve come, and how far we still have to go.
