We all know, in theory, what we need to do to have more money: Spend less, and save more.
But if that advice has you staring at your bank account in confusion, you’re not alone. “It’s like telling someone to eat better and exercise more,” said Ryan Frailich, a certified financial planner at Deliberate Finances. “Just because we know it’s good for us doesn’t mean we know how to do it.”
Frailich, a former teacher, delivered a webinar designed specifically for educators to help them understand how, exactly, they can spend less and save more, and what they need to know about planning for their financial futures. While everyone’s individual financial situation is different, these general guidelines can help you take control of your cash, and ensure you’ll never have to give up the job you love for the life you want.
Track your spending. There are tons of apps and programs that can keep track of your money (Mint, You Need a Budget, Clarity Money, etc), and there are also simple spreadsheets for people who prefer a lower-tech option. “Any system used with fidelity is a good system,” Frailich explained. So experiment with options you think you might like, and once you find one that works for you and your jam-packed teacher life, stick with it to get a handle on your monthly cash flow.
Set a budget. Once you have a sense of how much you have coming in and going out each month, set a monthly budget for yourself. But don’t frame it as a tool to limit your spending — instead, think of it as a system to make sure you’re spending on the things that are most important to you. “When there’s a gap between what we buy and what’s important to us, there’s pain,” Frailich said. “The more you can align what’s important to you with where your money’s going, the less pain you’re going to feel.”
Pay yourself first. Frailich thinks of paying himself first the same way he thinks about Oreos. If he buys a box of Oreos, he’s going to eat one at a time, every time he walks past the kitchen, and devour the entire box in 48 hours (at most). To avoid that, he has to make one good decision: not to buy Oreos. The same philosophy applies to money. “Make the decision to treat your savings like a bill,” he said. If you direct a portion of your paycheck directly into your savings so that it never hits your checking account or you set up a regular automatic transfer, you won’t have to make any other decisions about saving. It’ll happen on autopilot, and you can focus your energy on your kids instead of your wallet.
Give your dollars a job. Many banks will let you categorize your cash into buckets for specific savings goals. Whether you have your eye on a down payment for a home or a new down comforter, assigning each dollar in your savings to a tangible goal will help keep you organized and motivated. “If you have five grand in an account and only vaguely know what it’s for, you’re probably going to spend it,” Frailich said. “If you know it’s for grad school or a studio apartment or a puppy, you’re not going to touch it.”
Invest in future you. It’s hard to imagine yourself hitting retirement age, especially if you’re in your 20s or 30s. Frailich recommends looking at a picture of yourself from ten years ago to remind you how much your life has changed since then — and how it will continue to evolve until retirement. That can help you commit to putting money away now so Future You can have a happy, stable post-work life. The very general rule is to save 12-15% of your salary every year for retirement, but if you can’t do that, don’t panic. “There’s way too much complexity in everyone’s financial lives to say that this is the rule for everyone,” Frailich said. But if you start as early as possible, get your employer match, and save consistently throughout your working life, you’re likely going to be just fine well into your golden years.
Just like eating well and exercising, managing money is a lifelong process. “You’re never going to be done with it,” Frailich said. “There’s no end place to get to. It’s about progress, and doing a little better month by month.”
And if you go over budget one month or fall short on a savings goal, don’t beat yourself up. “Everyone makes mistakes with money,” Frailich said. If you learn from those mistakes and stick to these guidelines as much as you can, you’re going to spend less, save more, and feel far more fulfilled.