8 Reasons Why You Don’t Save
Posted by Gail | Filed under Saving
Whether I’m working with the couples on Til Debt Do U$ Part, or with my new Princesses, there are some common denominators. For one, virtually none of them have a clue how much they’re making or spending. For another, nobody is saving nuthin’.
Here are some more. Do you see yourself in here?
You’re paying off debt. Carrying debt means mortgage your future income. My number one rule – Don’t spend more money than you make – means tailoring your budget to the cash you have on hand. If you can’t make your budget balance while you get your debt paid off (finally!) and save, find a way to make more money.
There’s a designer logo on your handbags, shoes and clothing. If you’re paying a premium to flaunt a famous name and you’re not saving for the future you’re a fool. If you’re defining yourself by the brands that some starlette who makes 100 times what you make wears then you’re a pathetic fool. Dontcha know that many designer items are made in the same factories as less expensive goods? Expensive brands are no substitute for a solid financial future.
You wouldn’t dream of drinking tap water. I live in a part of the country with some of the sweetest water and every week as I exit the supermarket I see loads of people carting out huge packages of bottled water. My neighbour has her water delivered in large bottles. I scratch my head. And don’t get me started on sparkling water in restaurants… we were once presented with a “Water Menu”…OMG! $62 for a bottle of water? Really?
Your refrigerator is empty. You’ve seen me peek into people’s refrigerators. Inevitably when there’s no food in the house, the spending analysis shows gobs of money spent in restaurants and for take-out. If you want to have some money to save, make a menu for the week, shop with a grocery list, and stock your fridge. Batch cooking and freezing can save time on a busy night or when you’re just too tired to cook.
There’s a fancy hood ornament on your car. I’ve always considered a car a means of transportation, not a reflection of my identity or success. I scratch my head at young people starting out who think they should be driving a $50,000 or $60,0000 luxury vehicle. Even if you buy one second hand, they are more expensive to maintain and insure. I guess the be question is this: Is it more important to look rich or be rich.
You rent a public storage unit. Here’s an industry that’s grown out of our rampant consumerism. I can’t believe the number of people who not only spend money they haven’t made yet, but then rent a separate home to keep all that STUFF. Sell the stuff, pay down the debt and eliminate the cost of the rental from your budget. Wow, that’s killing three birds with one stone.
You hit the malls because you’re bored. The easiest way to not spend – and therefore to have money to save — is to stay out of the stores. If you’re shopping for entertainment find something else to do. Never go into a store without a list. And pay cash – or have the cash ready to pay off the credit card if you’re disciplined enough to use them as a tool and not as a financial bridge.
And my favorite: You think you’re too young, old, rich, poor, or busy to save. Everyone needs to set something aside for emergencies and for when they’re old and gray. To make it easy, make it automatic. Have a specified amount from each pay cheque transferred to your high interest savings account or retirement savings plan every month.
November 12, 2009 at 7:38 am
Out of all those reasons not to save, we only fit into one category, that is the “You’re paying off debt” category. However once the debt is gone all that money 20% of our take home pay is going to savings. Either retirement savinsg or a freedom fund savings
regards,
Jason
November 12, 2009 at 8:23 am
OH SO TRUE! THANKS FOR PUTTING WORDS TO THESE AREAS OF SPENDING!
November 12, 2009 at 8:23 am
Currently I’m paying off some debt I foolishly accumulated first when I entered the workforce after university. I feel stupid almost every day for having it as I finish school without any student loans. I’ve been paying what I can for the last year and it’s slowly but surely going away. I’ll be finished before the 36 month cap comes along.
I haven’t fallen into the “I can’t save because I’m paying off debt” trap. One of my colleagues is in the same situation as me and thinks I’m crazy for saving while paying off my debt as he says it will take longer to pay my debt and I’ll be paying more interest. I currently put 6% in RRSP and another 4-5% in a TFSA monthly. I think he’s crazy because if anything should happen he has no emergency cushion and will have to starting placing things on his credit card again thus making him pay off debt longer. I’ve occasionally had to dip into my savings when something came up and can be proud to say I never use the credit cards anymore… My colleague cannot say the same. Who’s the crazy one now?
November 12, 2009 at 8:44 am
nicely put Gail…it really is this simple.
November 12, 2009 at 9:10 am
What about this one?
“Why would I save now? I’ll make lots of money when I’m older, so I can worry about saving when I make more”.
November 12, 2009 at 9:18 am
well said!
November 12, 2009 at 9:18 am
Or this one “We’re always going to be in debt, so what does it matter? It’s just a fact of life”.
November 12, 2009 at 9:22 am
A friend of mine complains about where their money goes, and how they can’t save because of everything they have to pay for. Her list includes satellite TV, the car payments, etc. However, just last week, she said she “surprised” her husband with a new-to-them truck! Hmmmm, the two vehicles they had already were only less than 3 years old, and in better condition than mine! However, she felt she “had to” get him a gift of a newer truck. People like this just make me want to scream!!! No wonder she feels like they can’t save money. It’s like water in their hands!
November 12, 2009 at 9:48 am
Maybe they are holding “Good Debt”?
I want to eradicate that statement, you should have three levels of debt:
1) BLOODY AWFUL Debt : Credit Cards and Pay Day Loans
2) Awful Debt : Line of Credit and Car Loans
3) Not so Awful, but still Bad Debt: Mortgage and Student Loans
Good debt seems to make people think it is ok to be in debt, it is not!!!!
November 12, 2009 at 10:20 am
Watching friends live carelessly and frivolously is hard at times…they have told you specifics about how crappy their debt situations are and yet they spend money like water…and spend a lot of money playing around… a couple I know live an apartment, party like rock stars, tell us they want to buy a house soon, have babies soon, pay debt off ASAP etc etc and yet in no way live their lives focusing on these goals…they buy expensive gourmet food, go out to bars and restaurants all the time, buy so much stuff for their apt its stuffed, trips, buy so many clothes bc the pieces are “on sale” etc etc…I could give you so many more examples… and then they whine and complain about how much debt they have and are paying off etc. and they wonder when they will get out of debt??? Hmmm….something isnt computing here…you cant live lavish lifestyles and pay off debt…its just not the reality of the situation.
November 12, 2009 at 10:41 am
Diana – your quote is one I hear every day from so many people. Why is it okay to be in debt?? Or why do people think it is okay to be in debt might be the better question?
I am in debt and I hate it. I made huge mistakes when I was younger and I am paying for them now. At one point my husband and I were up to 11 credit cards with balances on a lot of them at 25% or higher interest. I am now working hard to get that debt paid down. We are down to 2 credit cards with a total of $3000 owing. Still have a huge line of credit to work on. That will be next.
My children are 9 and 11 and I am teaching them the smart way to save and buy things. Giving my boys the tools so that they will not make the same mistakes I have is the best gift I can give them. They know how to save for that item they want and they think before they buy. Do I always think that they are buying the right item, no, but it is what they want and they have saved for it, I say let them have it.
Sarah – I too have a friend like you described. She doesn’t live a lavish life but she lives off her line of credit and complains she doesn’t have any money. She shops to try to make herself happy when in fact it just makes things worse. I stopped trying to help her as it was just frustrating for me when she didn’t listen to any of the advise. When she is ready (if ever) she will change.
Some people never get it. That is their choice. We can’t help them. We need to help ourselves.
November 12, 2009 at 10:48 am
Well said – this is so true!!
Right now we’re trying to do some of each pay down debt and save.. the savings will go up once my student loans get paid off (2010!!!)
November 12, 2009 at 11:03 am
I had the same problem as Sarah with a friend of mine. She and her husband have 3 young children and are having a very difficult time making ends meet (they don’t most of the time) while her husband studies and works while applying for a better job. It sounds like a very sad story since they do both work hard until you see their house: it’s fully and very nicely furnished. And it’s a brand new house and it’s huge. My house might be the size of their living and dining room, but we can afford it without losing sleep on one income.
I hear the “I’m too old, it’s too late, it won’t make a difference” one all the time from one of my relatives. It’s true, if you don’t change your actions then it is too late. Knowing you can always do something is a kind of emergency fund too.
November 12, 2009 at 11:22 am
Gail, while I agree with most of your comments there is one I can give a different perspective on…water. For most I think tap water is fine, although where we live even my very healthy partner cant stomach the taste and uses a Brita. But for some of us with a compromised immune system tap water, even through devices like a Brita are not well tolerated. After much trial and error I have found a combination of bottled distilled and re-mineralized water works best…for me. My specialist even agrees this is not uncommon. We currently rent and so installing a good quality water purifier is not an option but once we buy a house next year it along with a HEPA filter on the HVAC system will be priority. Just a view from a small group of us.
November 12, 2009 at 11:27 am
BTW my partner was a bit proponent of buying used luxury cars but after he drove my used Honda Civic we nicknamed Brownie he was a convert. I dont subscribe to the “I have, do, own, think, therefore I am” philosophy, and neither does he now. We just sold our 1996 Honda Accord and now driving a 2007 Toyota Avalon traded in by a retired couple who stored it every winter and babied it. We got a really deal and calculated what we could afford to pay before going in to negotiate. I learned long ago to not fall in love in things…even a house. That’s a love that can cost you and sales people thrive on!
November 12, 2009 at 12:11 pm
Excuse number x: t=There is no money left at the END of the month!
DO IT AT THE BEGINNING OF THE MONTH!
Reminder! Time to fill out your T1213. Set up for regular contributions to your RSP and your employer can reduce the amount of taxes taken at the source! Set it up today and you can apply for the year 2010.
November 12, 2009 at 12:13 pm
I had little to no choice to acquire some debt in order to attend university. I still save though.
I don’t understand why people need to have huge homes with lots of things that is paid by debt. There was that guy on an episode of TDDUP that said he needs to show people that he is successful by having all these things. That attitude just pisses me right off. You are not successful if you haven’t paid for all that stuff. They also wanted a better/bigger house even though the house they were in looked really nice to me.
November 12, 2009 at 12:34 pm
Rebecca…Amen! I always love when people buy bigger homes and fill them more STUFF, than eventually need even bigger homes for all their STUFF. Im never sure if some us are buying a HOME or a status house. Ive learned that self respect, and self acceptance is far more valuable in the end than what others think of you. Feel sorry for those who leverage thier happiness and self esteem and hope they wake up one day.
November 12, 2009 at 12:59 pm
Diana says:
November 12, 2009 at 9:18 am
Or this one “We’re always going to be in debt, so what does it matter? It’s just a fact of life”.
*shudder*
As for the water argument, while we are lucky to have good water running through our pipes (as opposed to other countries), there are still situations where bottled/filtered water is better. Example: when I used to live at my mom’s, I would drink the tap water all the time. It tasted fine to me and I liked it. When I moved into an apartment though, the water wasn’t as pleasant. It’s not that the water treatment is bad, but rather how that water is piped to the homes that makes the difference.
And lastly, confession time. I just bought a pair of expensive designer jeans at an outlet store (on my visit to south US) that normally go for $189 US, and which I got for $96 with tax. My most expensive pair to-date, and perhaps I didn’t need it and I got suckered into owing the brand (even though you couldn’t tell because it doesn’t have any “badge of honour” on it), but at least I’m not in debt and save well enough. I guess it’s human not to want to be rational ALL the time.
November 12, 2009 at 1:09 pm
I agree with all the points, except the water (like some previous posters). Even though I live where Gail does, I unfortunately do not have access to town water. My well water has been judged unfit to drink by the local health department. No choice but to use bottled water for us.
November 12, 2009 at 1:13 pm
The only category we can fall into is the last one… we feel there are so many other things that would be neglected if we put much more into savings (we are too poor/busy), we do put some waya at the beginning of every month, so it’s moving forward. Not enough though.
November 12, 2009 at 1:17 pm
Once upon a time I was a spender without thinking of the future…certainly no savings. Then one day I got sick, sick enough to be off work for over a year. Between the waiting periods for EI and then disability litteraly sunk me. I couldn’t keep up with bills and live and when I mean live I mean our morgage and food. To say the least things fell apart very quickly. Needless to say bankruptcy soom followed. Lesson learned, no debt (the hard way and bad credit), I learned that I need to live within my means and try to save for these things. I am the an example that thinking you have time to deal with things is not always true. The funny thing I don’t live in a nice house, drive a nice car, wear designer clothes, own expensive furniture, go on trips or party all the time (live the life riley as my Mother would say). So the question that I ask is, ‘How the hell did my debt grow so much?’. This is something I ask everyday.
November 12, 2009 at 1:22 pm
My biggest excuse was that I was too busy with the endless chores of raising small children to spend any time worrying about where I spent my money or how much money was being wasted instead of saved. I was too busy to spend the time organizing and keeping track of my various bank accounts. I was too busy to spend the time to meal plan and spend my grocery money wisely… I was just “too busy” so that is the one excuse on Gail’s list that I can REALLY identify with.
Now, I’m still really busy – still have all these children in my care, but I take the time to make sure we are following a budget, paying off credit AND saving for emergencies and our future. I wish I had done this YEARS ago!
November 12, 2009 at 1:32 pm
I hear you, Mrs. T. I wish I had done this years ago also.
November 12, 2009 at 2:51 pm
I don’t think water is such a big deal.
I wouldn’t drink some of the municipal crap either.
We use brita and some bottled.
November 12, 2009 at 3:01 pm
I very rarely buy bottled water because I don’t like to spend money on something I can get out of the tap. I grew up drinking tap water and it still tastes perfect. Since I moved away from home my problem with tap waters is either taste or smell (in college it smelled like pool water) so I got a filter pitcher and when I bought my house I got a fridge with a built in filter. Right now the only time I use bottled is for the gym, so I am planning a purchase for a reusable bottle to fill out of my fridge.
It amazes me the number of people who not only have storage units but also have the garage filled to the brim with stuff. My parent briefly had one first to store some furniture of my grandparents and then between houses when they were living in an apartment. As soon as they had the new house everything was moved from storage to the house. Anything that didn’t work in the house was given to friends who needed it. I seem to be very lucky in that my friends seem to have the same money values as I do.
November 12, 2009 at 3:30 pm
We have perfectly good water here in Toronto, yet some people insist on sending plastic bottles to the landfills…
November 12, 2009 at 5:36 pm
@ Jason
Your comment aroused my curiosity. I sometimes read about people who save 20%, 30% or even more of their net income, and I wonder:
1) How much money are these people making? I make $30,000 gross, and while I do save (15%), there are just too many other categories (rent, bills, medical/dental, groceries, pet costs, birthdays/Christmas, charitable donations) for me to be able to save that much.
2) Are any of these people single? Being single means that you don’t have an extra income to cover any of the above costs. Can single people save as much as those who are married?
3) Do those who save this much also give a monthly percentage to charity? If I included that percentage in the amount that I “save,” it’d come out to 25%.
I’m just wondering if, in comparison to others who save a lot, I’m saving enough. And if I’m not, how can I save more? I’ve already followed the advice of looking through my TV/internet/phone bills, cutting my groceries, etc., but I don’t think I can cut any more without cutting out a life.
I’d like to have as much saved as I can for emergencies and retirement, but I keep feeling like I’m not doing enough and won’t have enough. Any advice or answers to these questions would be appreciated.
November 12, 2009 at 5:46 pm
Here goes: I think that if you live somewhere with access to clean, treated water then I think that buying bottled water is lazy, wasteful, and irresponsible.
Buy a water bottle you like and refill it.
Yes, you can recycle plastic, but there is a lot of energy required to do so. And a lot of energy is required to create plastic. There’s only so much oil in the earth, and we use it faster than it can be replenished.
Then there’s the pollution involved with making the plastic, the plastic that ends up in landfills and the ocean, the transportation of bottled water, and what the displacement of fresh water does to the community where the water is being taken from.
It just doesn’t make sense to me.
November 12, 2009 at 6:16 pm
@ Diana – holy cripes, I knew a couple just like that. Perpetual university students. They had two kids and they ended up having a third. I recall that while she was working toward her PhD, but not taking classes for a few semesters, she would continue paying to be enrolled in the university because if she didn’t, she would have to start paying back her student loans. Paying every semester to be “enrolled” was cheaper than paying back her student loans.
I can’t imagine making decisions like that.
November 12, 2009 at 6:19 pm
I have two friends who work with municipal water in two different capacities, and neither of them would TOUCH bottled water. The requirements that must be met for municipal water consumption are far more stringent than those of bottled water. Municipal water plants are inspected every day, and bottled water facilities are tested once every THREE YEARS.
AND about 25% of it is just tap water anyway. If you do research, you will learn that Dasani is filtered tap water that is bottled in Brampton (owned by Coke.) Aquafina is owned by Pepsi and is also municipal water. They run it through one more filter – you could do that at home with a Brita for far less, and with far less environmental damage – and charge $1.29 for the end product.
Certainly if you don’t have safe water coming out of your taps, that’s a totally different issue. But anyone who buys bottled water in Toronto, for example, is really a sucker.
November 12, 2009 at 7:05 pm
Rhiannon,
My hubby and I save about 20% right now, in addition to paying about 7% towards our LOC each month. We are a two-income family, though I only work part time. To answer your 2nd question, yes, we are a couple sharing expenses, but keep in mind we are raising and supporting 4 children. As for charity, we do give but not regularly as one would if they tithed – we probably only give about 1% though in the past we were giving much more. This is an area of our finances that I do want to address and add into our budget. We are very fortunate and *should* share more of our good fortune with those in need. Our children each have a “sharing jar” which they add money to each month. We are getting ready to empty out the sharing jars and my children want to fill Christmas shoeboxes for needy families with their sharing money.
November 12, 2009 at 7:44 pm
@Rhiannon – I hear ya, sistah! Everything you said is EXACTLY how I feel too. Now sure, I make $45000gross, BUT, I’m single (going through divorce), and I’m a mom to six kids (ages 14 to 6). I feel that there is very little advice for singles, and even less for those of us who are starting over – most articles, etc are geared for double-incomers. I am terribly stressed out right now about how to pay off my $11000 in credit card debt (which is all tuition/starting over expenses/car repairs), while striving to put away a little to buy a house, and worrying about my retirement.
How does a one-income person possibly do it all? I don’t know.
November 12, 2009 at 9:31 pm
@Rhiannon.
I think you are doing a great job at being able to save 15% AND give to charity 10%. I know that I haven’t given thought to monthly donations, but I do donate my time to food banks, charities and soup kitchens. I don’t think it is absolutely necessary to donate money. Sometimes giving some of your time is more valuable.
Gail’s postings seem to be more geared for people with middle to upper class earnings, but this should not deter anyone from applying the same principles to their own life and circumstances. Don’t worry about not being able to follow through to the extent of Gail’s budget guidelines for everything. They are only guidelines and not laws set in stone.
If you worried about not having enough at retirement, you could try to seek other employment which pays better so you could boost your savings. You could also go back to school to learn additional skills which can help you get a job you want that pays well. I know a lot of trades pay much better (70k and up) after apprenticeship is complete. Also working in municipal/provincial/federal or large corporate companies tend to pay better.
I’m trying to follow Gail’s advice since I discovered her show two years ago. I’m a single 27 year old saving about 35% of my net income. I max out my RRSP, TFSA and company share options every year. I also try to do what I can at work to earn my salary. Showing initiative and hard work can really help. I currently make about 75k gross. Besides my mortgage, I have no other debts and my goal is to be mortgage free in 8 years.
It really is about balance. Don’t try to have it all at once. I don’t go on the expensive vacations out of the country every year or have the expensive car or handbags. I find local tourist things to do on my vacations. I live well below my means. When I graduated, it was a lot easier continuing to live like a student.
November 12, 2009 at 9:38 pm
“I feel that there is very little advice for singles”
I don’t know why people say that so often on this site. Most of the advice does not change because you are single. The percentages for the budget are guidelines and do not change because you are single. The financial strain can be harder for single people because there is one less back up for income.
Bottom line, it has to fit into the budget. Calculate 2.5x your gross salary to figure out whether you can afford a home in your current town. Then decide if it is worth saving for it. Once your are done with your credit card payments, put that amount asside for a house if you wish it.
A single person can put aside 10% of their income for long-term savings. Do it early in the month and what is left is for spending (and pre-planned purchases). Take any net pay increase to increase your savings.
If you want it, you’ll do it. Dream and find which dreams can be set in motion (so may need a delay).
November 12, 2009 at 10:04 pm
I managed to save approx. US$4,000 while paying off my debt. It’s not much I know but 12 months ago when I received a small pay rise I set up a direct debit to a money market account. I never had it to spend and I never missed it.
And as for the empty fridge, by Friday night my fridge IS empty. I plan my meals, write a list during the week, shop once on Saturday and after Friday’s dinner the fridge is empty. I only buy what I need for the week. This stops me from wasting money on food (or buying junk food
). This food shopping/meal planning lesson comes to you from Gail. 
November 12, 2009 at 10:13 pm
Marie: I think what we’re getting at is perhaps that old saying “Two can live as cheaply as one”. Now, I know that’s not EXACTLY true, but it’s pretty close. When you have two income-earners (let’s say $100,000 combined), it’s far easier to save 20% than when you have one person making $50,000. The rent on the apartment is the same, the cable is the same, the power bill is pretty close to the same, etc, but you have half the income to do it all with.
November 12, 2009 at 10:15 pm
Also, the cost of purchasing a home doesn’t change if there is only one of you saving for it. The downpayment needed is the same.
November 12, 2009 at 11:00 pm
Single living:
Life can be harder financially as a single person. The basic budget rules do not. It might not be possible for a single person to own a house (low salary with insane house prices of some cities) or the house might have to be smaller (therefore a smaller down payment or longer time to save). People used to rent a room in someone’s house when they were single or share an appartment. MANY of the hints on saving money apply. A greater discretionary income may allow for a better cable package. Some hints are harder (especially when you have six kids). Someone once told me that life is now built for a double income household (one of Gail’s posting on household net income vs cost of living speaks to that). Percentage are percentages.
Low income:
You get to keep a greater percentage of your gross income because taxes take a greater percentage of higher incomes… I could argue points for both sides.
We all have difficult choices to make in budgeting and life. It is no fun to get an ok income eaten up by student loans, but budget awareness helps in making better decisions. If you got used to nice things, it is hard to give them up. Appreciating what you do have is important. Some people did not appreciate where I lived during and after school, but cheques did not bounce. I have a financially imperfect job in an imperfect city (carrer-wise) and I need an occasional part-time job for the fun stuff. No easy answers, but many tools. Will and sacrifice help. Find something fun out of every day, even if it lasted only a second. That is a good rule in any pay-scale.
The grass is not always greener, but drought tolerant seeds come in handy.
November 12, 2009 at 11:14 pm
@ Rhiannon:
I currently save 8% (and 6% is matched by my employer) of my gross income, but that amount will be boosted to ~55% after my final mortgage payment on Dec 15, 2009.
1 – While I do make a healthy salary (more than the average dual income family in Canada), I also managed to cut my expenses to a point most people won’t contemplate.
2 – I’m single with no kids, but I do help out my parents, who are both unemployed, and my sisters, both of whom recently finished university. (No more tuition payments! Yay!) And I still manage to save MORE than most dual income families because I want early retirement more than they do and am willing to forgo things like cable and hitting the bars every weekend.
3 – I do donate a respectable amount to charity. It’s hard not to when so many executives at my place of work chair so many worthwhile charities. This is one area where I will succumb to peer pressure.
That’s really a loaded question and any answer I give you is not going to influence you in any way because “[you] don’t think [you] can cut any more without cutting out a life.” Frankly, that statement says you’re not willing to change by either trimming your expenses further or getting another job to boost your income because that would cut into your time for a life.
November 12, 2009 at 11:32 pm
I went about it all wrong – “I’ll save when the mortgage is paid off”. Luckily, my mortgage was paid off in 14 years and nothing went wrong – like I didn’t get in an accident or get sick and not be able to work etc. So now I’m working double time, sticking to a budget, paid off every single credit card debt last year and started putting about 40% of net away to build up the emergency fund, and about half what I was paying toward mortgage in the property taxes and home repairs fund. Imagine my surprise when we had to get the roof done over the summer, it went about $2,000 over what we budgeted due to some structural issues that were uncovered and we actually were able to pay cash for the whole bill (dipped into the vacation fund for the unanticipated overage but still paid cash).
I must say though, I think the only way I have been able to accomplish this is because I have no mortgage and I have eliminated all other debt. I wouldn’t be able to do it if I still had debt to pay off. And it would be a heck of a lot harder with a smaller salary and with dependents (no kids really helps too…). I admire everyone here doing their best with mortgages and kids to raise. I know I’m leading a charmed life in comparison.
November 13, 2009 at 12:00 am
Alison, actually, Aquafina is thoroughly tested, maybe not by an outside government agency, but there is a quality control process that tests batches frequently. Also, there is a 7-step filtering process involved, so it’s not just “Brita filtered” water relabeled. But anyways…
Rhiannone, I’m single, living alone and make 50K gross. My budget plan has me saving 38% every month, but there is a fair bit of “fun” money involved for entertainment, eating out and clothes. I have no debt, and I don’t donate to charity at this point. I don’t have Internet as I either can check personal mail at work, or use my parents’ access from time-to-time. If I was a little tighter or more disciplined, I could save more, and usually I end up doing so because I don’t really use much from my clothes budget. Now, if I was living with someone, that would make it easier to save more because I’d have someone splitting the rent with me so that would save me a few more hundred dollars per month.
So definitely being single has it’s disadvantage from a savings side, however, it’s also important to point out that being single means you don’t have to worry about “date nights” with the partner, or nice gifts –
– so you can save money that way too.
It sounds like you’re doing fine. Granted everyone is different, but it sounds like you’re saving a decent amount. Make sure to have some fun.
November 13, 2009 at 12:02 am
@ Rhiannon
If I were working fulltime, partner and I would be saving way more (we are both teachers). Right now we are living on mostly his income.
Living on my own last year with a $45000 salary I was able to save a bit, but it was very very tight, do-able, but not so much flexible.
November 13, 2009 at 12:04 am
Stephanie H. says:
“It amazes me the number of people who not only have storage units but also have the garage filled to the brim with stuff.”
I’m always shocked at how many of my neighbours park on the street because there’s no place to park in their double garages full of STUFF. Then there are their RV’s, trailers and boats. I get just a bit ticked when they start parking by my driveway because they’ve run out of room at theirs.
Like Trista, I’m paying off my debt (a car loan) a bit slower because I prefer to put money into my emergency fund while paying off debt. Yes, I could pay my car loan completely off, but then I would have very little to fall back on in an emergency A friend of mine (who has always been very frugal) has just had her spouse diagnosed with cancer. You can bet they are glad they have spent and saved wisely.
November 13, 2009 at 12:07 am
@Rhiannon
We had a minister carefully explain to our parish that the 10% tithe is no longer a realistic expectation. 10% was the expectation before the government stepped in to take over administration of social welfare, which we pay through our income tax and property taxes. Now the government does much of the work that the 10% tithe was expected to do. His recommendation was 3-4% tithe. That should help you save a little more.
November 13, 2009 at 1:01 am
Ann, you obviously are very disciplined and determined.
However, even Gail recognizes the need for ” a life” and budgets her couples accordingly.
We are only here once and I doubt that our purpose is solely to be head down, working every minute for soon your life is over or you are retired and have an MI, stroke or an unfortunate, life-altering diagnosis.
There must be some fun and release.
And to the dual incomes, having lived as a single mom and since remarried, I will vouch for the fact that 2 incomes is VASTLY easier in all ways. I now have the very good fortune to be able to save approx. 40-50% of my income. But it only works if you are both on the same page regarding saving/spending/life, etc.
November 13, 2009 at 2:51 am
[...] Vaz-Oxlade tells you 8 Reasons Why You Don’t Save right on target as usual (wish she wasn’t [...]
November 13, 2009 at 6:45 am
Ann – telling us that we are not “willing” to cut more out of our budgets, or make more is kinda mean when you do have all the information – for many of us, we are already “bare bones”.
Diana – thank you for the back-up. Sometimes it’s nice to have someone just say “Yeah, I know what’s it like it. I know you’re trying, keep your head up”
MP – OMG!! I’m NEVER gonna have a date or a nice gift AGAIN???? Just kidding – you made me laugh.
I’m getting off my pitty-pot now…..and going to work.
November 13, 2009 at 9:10 am
I want to thank you all for your comments. I just wanted to let you know that I am currently in school part-time, while working full-time. Since I’m visually impaired, it’s harder for me to do things like reading, so I’m not able to take as many classes at once. Still, I figure starting now and finishing later is better than not starting at all.
When it comes to expenses, within my budget, I have $350 a month for groceries, clothing, hygiene, personal care (including things like haircuts), household expenses and entertainment. I don’t have a car (obviously, since I can’t see well enough to drive) don’t have cable, have a cell phone plan that costs $8.00 an month including taxes, and, until I went back to school and needed it, didn’t have internet at home. I’m really not sure how I can cut back any further.
Of course, as some of you have suggested, I could cut back on charitable donations, but I’m not sure I should do that. I have known what it’s like to live on welfare, and rely on chariable support. I’m glad for the salary I have, and feel like I should give back as thanks for what I have – not only in a monetary fashion, but also from my time. Around this time of year, I’m busier than ever, thanks to volunteering for the Food Bank and the Salvation Army, collecting donations and giving presents to the needy.
However, the question of how much to give financially has always been a hard one. I’d love to be able to give everything I have, but since that’s not feasible, giving 10% of my net income and building my budget around that seems like a fair compromise. After all, while I do want to have enough saved for myself, I want to make sure that I’m not keeping all my wealth just for me. That’s not to say that everyone should give that much; it depends upon your income and circumstances. However, if you’re making a decent income and able to save 20% or more, perhaps you might think about scaling back a bit – say to 15% – and giving the other 5% to those less fortunate.
November 13, 2009 at 11:15 am
@ Diana – Gail regularly (1) slashes people’s entertainment budgets, (2) tells people to find cheap forms of entertainment, and (3) tells people to boost their income, even if getting a second job means weekends are part of the work week. And no, I’m not all work and no play. I somehow managed to travel to three continents and over a dozen countries and instead of going out to the bar every weekend, I stay in and make use of my PS3 and massive DVD collection.
@ Chubby Bunny – No, I didn’t have all the information. I didn’t have Rhiannon’s budget. I didn’t know her age, occupation, etc. And I’ve seen many instances where one person’s definition of “bare bones” does not coincide with mine. “Bare bones,” believe it or not, is a relative term.
November 13, 2009 at 9:45 pm
@Rhiannon,
It sounds like you are doing a really great job; but just like those individuals who compare themselves to the “Joneses” and go into debt to have the illusion of wealth (status), you seem to be beating yourself up for the opposite reason of thinking that you aren’t saving enough and need to cut, cut, cut just to keep up with what other people are doing. As another poster has mentioned, there are many factors to consider: your age, salary, debt load, where you live, daily expenses, etc. when figuring out how much you can reasonably and comfortably save and still have a life. Some people will pinch every penny and be miserly and not enjoy life – which isn’t good either. It is about balance and what is right for you and your life circumstances (20s – student loans probably take a big chunk of salary; 30s&40s – house purchase / children; 50s – saving for retirement). It really depends on where you are in the “life cycle”.
My house is paid off, and I currently save about 25% towards my retirement fund. I’m a single income and any salary increases I receive are applied to my rrsps. You never miss it when it gets taken off the top! Pay yourself first and you’ll be ahead of the game. I live below my means – but have travelled extensively, work part-time for 10 yrs now, have cable, internet, have a car (used/10yrs old) . . . it can be done – you just have to decide what is important to you. I hate debt – I don’t sleep well if I owe money!
November 17, 2009 at 9:13 pm
DO NOT WAIT to get burned before you get smart with your money!!! 15 years married to the wrong guy and a smoking pile of financial ruin just over my left shoulder has taught me the hard way.
I make enough income on my own to feed, house and clothe myself and the two kids okay, but as long as I am single, there’s damn little left at the end of the month to save, and that little bit ends up getting sucked away by contingencies. College fund? Nope. Comfortable retirement? Nada.
10 k legal bill racked up because the loser ex would rather play brinkmanship than be a responsible man? Yep, that’s what I’ve got.
I try not to get angry/sad/scared anymore about the situation I can’t change. I certainly live on cash (bankrupt people can’t get credit anyway ;-p ) and I will NEVER bloat my lifestyle as big as my income again….thanks in no small part to Gail’s advice. But unless I find myself a partner so that our cost of living becomes shared, my kids and I will always live that much more modestly than a two-income family. It’s just the way the world works.
Find a way to make more money? Spend more on childcare….
I love Gail, but some things even she can’t fix……
START YOUR BUDGET NOW.