by Karen Telleen-Lawton, Noozhawk Columnist (read the original in Noozhawk by clicking here)
Last time I discussed buckets as an image for allocating income among fixed and variable expenses, and the importance of the savings bucket. Americans’ typical savings buckets can be likened to the little plastic beach pail, where what is needed is more like a forklift.
It’s one thing to rail at our low savings rate and admonish ourselves to Just Do It. We’re under a constant barrage of ads for enticing products. I’m hoping to increase success by suggesting ways to overcome this spending inertia.
One benefit of using a high savings rate is acclimating to a simpler standard of living. This is better for the psyche, better for the environment, and appropriately conservative considering the unknowns of life.
I consider my family very fortunate, but recent serious health issues have made me grateful not to be needful of a high standard of living.
I enjoy some expensive pastimes, but my highest pleasures are nearly-free amusements like hiking, reading, biking, bird watching, and relaxing at home or in the homes of friends.
An additional benefit of saving more is improving your ability and frame of mind toward sharing your wealth. Supporting causes you believe in is a particular pleasure of under-spending.
You can be spontaneous, sharing as disasters happen and when the spirit moves you. You may prefer to build donations into a spending plan that earmarks 10 percent or some other amount toward charity.
Finally, saving more increases the chances you will be able to face your future self with compassion and not fear. Here’s a trick to make it easier:
Take a selfie and send it to an age-progression website (try a free one, naturally). Print out a photo of you at 85, and tape it to your bathroom mirror.
Every morning and evening, greet your future self and promise her or him that you are taking care of them now, by taking care of your body and your finances.
Think of her when you ponder a purchase or settle for a 4 percent savings rate. This rate will have provided her one year of retirement income a decade or two ago. (What’s she living on now?)
I may not be talking to you. There are only certain people who need to save. That is, anyone who doesn’t have a trust fund that amply covers their current and future costs. Folks whose children have pledged (preferably in writing) to support them in retirement can perhaps be less concerned as well.
If you don’t fall into one of these two categories, saving should be part of every paycheck from the time you’re a teenager babysitting and mowing lawns. Consider it a fixed expense.
I understand, particularly in this age of uncertainty, that saving and investing seem both difficult and risky for a future that seems very unpredictable.
As a financial planner, I desperately want to guarantee my clients a low stress future. It can’t do that. There will be political and climate upheaval, illness, taxes, and death.
Nevertheless, organizing your financial life will ease your whole life. Even if the figures you face are lower than the ones you imagined before you opened your eyes, your confidence will increase.
It’s true that the truth will set you free: free to live and free to give.
Karen Telleen-Lawton, Noozhawk Columnist
Karen Telleen-Lawton is an eco-writer, sharing information and insights about economics and ecology, finances and the environment. Having recently retired from financial planning and advising, she spends more time exploring the outdoors — and reading and writing about it. The opinions expressed are her own.