Meet Alicia, 26, from Starkville, MS

Excellent read…I share your pain…I can save really well when I have a goal, but the “goal” of just having money lying around doesn’t inspire me. Until I need it, of course.

Thanks for the great post.
Perhaps you want to start putting some in 401K if your company has it. Even better if there is a match. Otherwise, perhaps a bit in Roth IRA, which is non-deductible, but tax-free when you take it out after retirement.
Perhaps it’s also time to think about investing. Learn the basics about stock, mutual fund, insurance, even something about rental. It never hurts to know.
Good luck.

Alicia, I really enjoyed the humor and sincerity of your writing. Do you have your own blog or publications that you regularly contribute to? I’d love to read more!

I love your blog. I totally understand! Grew up in MS but now live in Seattle. Love to travel and pretty much had the same financial goals you do – paid for the wedding in Charleston last year outright, paying off the student loans before interest accrues. Our big goal right now is stashing money in our “Married People Savings” account to have a baby. My parents are in awe that we are actually even able to think about saving money to have a baby. The times, they are a changin’.

Hi Alicia,

I really enjoyed reading your post.

One of my goals is to save up money for a larger warehouse. Business of selling video games is increasing for my wife and I… so much so that we need more room for merchandise!

Reading your post and comments has given me ideas for tax deductions!

Thanks!

Here is an incentive to curb your spending ways: you are developing bad habits. Sure right now you can afford what you are doing but more likely than not a time will come when you will need money again and then it will be harder to save then it was before because you will have to fight all those bad habits. For example look at yourself right now, you talk about needing to cut down on travel and then in the next paragraph describe your very next imminent trip. I love travel too and I love shopping and spending, but I also know they are costly and hard habits to break.

Another reason to save: if you hate living in mississippi so much its likely at some point your going to want to move. In fact it honestly might save you more money and bring more happiness if you did move because you wouldn’t feel the need to travel so much. Anyways you could save up for a house – that’s a big deal. Here’s a goal for you: buy your next home without a mortgage.

Or your car will break down and without savings your out a lot of money. I would have a nest egg just for another car. I would also have a savings account just for in case I lost my job. In that one I would keep enough savings to equal a year ore more in pay. These days finding a job can take up to a year or more.

Just some food for thought from someone without any money, huge amounts of debt and almost done with their first year in law school.

Congratulations, Alicia, on a very interesting read, and a successful track record of realizing your savings goals. I am forwarding this to my 25 year-old daughter, whose goal is to pay off her student loans and become debt free. Your article is very encouraging, and I look forward to reading more.

@ Jeanray. I hope your daughter does pay of her debt. It’s such a freeing experience. It’s so much easier to just buckle down and do it now and then not have it hanging over your head. Thanks.

@ Kathryn. I had a very simple wedding. Very simple. I bought a $99 dress from a local women’s clothing shop. The venue was a community center with a giant mural on the walls painted by Walter Anderson (a wellknown MS artist) so I didn’t do much of anything by decor. My family got together to decorate cupcakes. We bought most of the food at Sams. DJ was the Ipod. You get the idea. I can be very very thrifty. I was the same way as a student. I took overload classes and summer classes starting right after I graduated high school so that I could finish my undergrad in 3 years. I worked various jobs during that time: sewing pretty letters on sorority girl shirts, changing diapers, etc. Anyway I always had money and debt in the forefront and let that guide me. I got into cooking to save money and now I love it. I don’t think about the things I do n’t have, and focus on the things I let myself have. The only things I have to have are food and rent. Everything else is extra. Thanks for the comment. Good luck.

@ Amee. Thanks for your concern. Yes, I did talk about needing to stop traveling so much and then went on a trip. A trip I planned in November to visit a friend stationed at an air force base. We stayed at her house. I went shopping at Target, the giant asian market, and an outlet mall. I spent less than most people would have on a hotel room for the weekend. Don’t underestimate me. I am very very thrifty. I pay all my bills on time. I have substantial savings for my income. I have more in savings than I earned in 2006, if that’s any perspective. I cannot wait to move, though I don’t think it will curb my desire to see the world, but it will cut back on so many small trips, though 95% of our trips are to visit family and friends, so I hope we are able to keep that up, just maybe not 25 weekends a year’s worth! Yes, my car has broken down and will break down again. We had a small savings goal to be able to buy our next car outright. That’s definitely taken care of. The plan is when one of our cars go, we’ll spend the rest of our time in MS as a one car family. We both have bikes. We both have the same destination in the morning, so that will be fine. When the next car goes, we may not be living somewhere where we need a car, and if we do, then we’ll have the cash to buy it like my husband bought his last car, outright with a check. I hope law school is going well. That’s a situation that’s hard to avoid getting in debt, but hopefully you’ll have a good career that will let you pay that off quickly.

@ George. Thanks! Yes, I have the 3 months, but now I’m working on making it 6 months since I said I was going to save more. It’s a balance you know. I don’t want to just save and save and save and not have any fun. I have not tried cruising, but I really want to take a cruise to Alaska. I’ve had several people tell me how wonderful it is. We do a lot of short weekend trips because my husband is doing his doctoral research and usually can’t get away for extended periods of time.

@ Jake. Thanks. A warehouse is a pretty nice goal. I like things that are concrete like that. Then you can look at them later and say, I did this.

@ Addy. Wow that sounds like a great idea. Thanks. ATW. Now that’s a drive to save for my retirement. My current dream is to retire, get a camper, and see the U.S. (and parts of Canada and Mexico). Now you got me thinking I’m not dreaming big enough.

@ Amanda. I love that you have a married people’s savings. That will help you so much. With all the stress of becoming a new parent and all the time off work, it will be such a relief to have a savings there to help and not to fall into credit cards like so many people I know have. I know I’ll miss Mississippi when we finally do move, but I also know we’ll be back to the coast to visit our parents all the time, so I’ll still get my favorite parts. I could never leave here and not come back.

I have to agree with Amee – there are plenty of savings goals that should keep you busy. For anyone driving an older car, it’s always a good idea to have enough money saved up for major repair or replacement. Otherwise when something happens – much more likely with an older car – you are out of transportation, which could potentially affect your ability to work.

I would also agree that you might want to look at saving up for a move to a larger metropolitan area. Moving would probably save a lot of your travel expenses, since all of the stores you are looking for would be closer. Of course, costs of living may also be slightly higher, but it seems like overall it may keep you happier. Factor in that you may need some money to cover income while you look for a new job (depending on how far you move,) and you have a big savings goal right there.

And of course there are all the fun things to save up for in the meantime, like trips to NYC. These would be small savings goals that you can reach much quicker, and the satisfaction of meeting these goals will help you stay focused on the larger goals you have. The key is to figure out how much you can afford to save per month, and then portion it out to meet your different goals based on your priorities. You could even consider keeping each pool of savings in a different account (free with ING Online accounts) so it is easy to see your progress towards each goal and to keep you from inadvertently taking too much from one goal to meet another.

Good luck with developing your own set of savings goals, and sticking to them!

Alicia,

Your first blog will definitely keep me coming back to read how you’re faring. As most folks have found these past 2 years, saving has been difficult. Not feeling guilty about a shopping expedition…next to impossible. But you don’t have to spend much to get something new. I’ve become more and more active on sites like Craig’s List and eBay. Selling items that I haven’t looked at or touched in over a year and then using only that money as my “mad-cash” for purchases.

I call it “mad” cash b/c I’m usually mad when I gather all my items together. I get mad that the government helped us into this mess, mad that I didn’t take control as a consumer sooner and mad that I have to part with the blender/mixer/Easy-Bake oven combo…that I’ve never used. I take that “mad,” turn it into positive energy and get going on the Internet to barter or exchange or sell on Craig’s List and use the cash for something fun! It’s great! I don’t amass anything because I’ve gotten rid of items to make room and I don’t use any of my savings because I don’t go shopping unless I’ve sold something first of equal value.

Bartering is also fun and requires no cash. It tends to make Americans uncomfortable, but it’s expected in just about every to other country. Since you love to travel, they even have ‘exchanges’ where you can travel to another city or country and use someone’s home or car while you’re there if you do the same for them here. Just be sure to “vet” them carefully of course.

FYI, I disagree with one of the previous comments about paying cash when you’re ready to buy a home. Financing can be very useful and actually help you save money in the long run. Several mutual funds still pay higher interest rates than the current 30-year mortgage rate. You may be better off letting your money go to work for you in a mutual fund earning 7-9% and pay 5-6% on a mortgage. That 2% delta could become your savings, plus you have cash handy for “living” and paying timely on a note will improve your credit rating. Just don’t buy a house that’s too much for your limits. Keep up the good work!

@ Hetal. Thanks! Life is short, definitely dream big (and manage money well).

@ Amanda from Philly. I definitely have mixed feelings on how to pay for a home I don’t know I’ll ever want to own. Some people are very much focused on buying a home and putting 30 years worth of money into them. I’m not sure that’s for me. I’ll cross that bridge when I get there, especially after my husband is employed and we are in a position to take on such debt or savings goals. I’ve been so excited that craig’s list and freecycle are slowly expanding into MS though I keep seeing most things near me are in Mobile, the Coast, or Memphis which are 2, 4, and 5 hours away. Haha. That sends me back to traveling. One good thing about being in a rural area is I don’t have much opportunity to buy things I don’t need/use, and I get lots of free stuff just from facebook. I got a free breadmaker last week which I used to make whole wheat rolls for Easter lunch. At a work meeting this week, I’ve found myself a free laying hen and someone offered me free horse manure as well. Probably not quite the things you’re picking up, but pretty exciting stuff.

@ Neil. Thanks for the info. I’ll check it out.

@ Terry. Y’all are so right about the car situation. We’ve repaired both our cars in the last year. I won’t say luckily because we worked to save that money, but we had the money to pay for it. We also have a plan and the money for replacement cars. We also have bikes if push comes to shove…or more like foot goes to pedal. Aww, don’t judge me too harshly for that bad joke. I don’t actually know if I want to live in a metropolitan area. I love to visit them, but I just want to live in a nonrural area within an hour and a half of a metro area. That would be ideal for me. You’re right, start up expenses are tough, turning on utilities, moving truck rental, deposits. Eeep.

@ Kathena. Thanks for the reading suggestions. I can’t believe I never thought about an ATW trip.

@ Lauren. Wow, thank you so much. That’s a great perspective. Definitely say no to the $125. That’s more than I spent on my wedding dress!!!! An $80 bikini must be very very cute, but again, I could spend that $200 on a weekend out somewhere fun. That’d pay for meals, zoos, a little shopping, and a botanical garden visit. Or it’d be groceries for two weeks. Or my car insurance payment. That’s even more than I spent on my bike + the helmet + the lock + the supercomfy seat,or it could be the last bit to bump me into another range in my savings. Anyway, that’s how I think about spending money, plus I can never buy anything I do not have the cash to pay for. Ever. I know this lifestyle isn’t for everyone, but I’ll never file bankruptcy this way. I’ll never have creditors call me. I’ll never have a sleepless night worrying about how I’m going to pay for anything. I think that’s a comfort more people to strive for.

Alicia,

I enjoyed reading your post. Thank you.

KK

@ Sarah. Being the breadwinner is an interesting experience I never thought I’d have especially since I was marrying a scientist and I’m just the little ole English major. Things happened that have prolonged his degree further than we foresaw. And living on his graduate stipend wasn’t an option, so I took some jobs I don’t love, but keep us comfortable. While many things as a couple are great to make every decision together, we don’t do that with our finances. I control how much goes into our savings. I balance that choice based on our bills (tuition, insurance, utilities, books) and our planned trips and purchases. If we want to buy something from our joint accounts that costs over $100, we talk about it and decide together if we need it and how’s the best way to go about it. I think we talked a good 3 months about buying bikes before we did it, even though we had the cash to do it. It was just a big investment and we wanted to make sure we’d get our money’s worth out of them. The big thing we’re talking about now is a weight set. We’re both becoming more and more fitness oriented and if we had a weight set at home, my husband could do his weight exercises in the evening instead of in the morning at the gym, which would allow him to cut the time he spends at the gym and get in the lab to research earlier. So we’ve started looking at options. Weighing costs. We’ll shop around like this for a few weeks or months before we make our decision. We also keep some money from our paychecks in our own fun money to spend. That’s where if we decide to eat lunch or pick up a cd comes from. Since we don’t eat lunch out very often or have many options to buy things in town, it adds up and that’s what we use for when we go out of town. We’re never dipping into our savings to fund a trip. Having an agreed upon amount of money you can spend on whatever I think is good for couples. It’s like we give ourselves biweekly allowances. I think Dave Ramsey talks about this sort of thing with his envelope plan. I lump groceries with my set bills. We have to eat. Seriously just sit down and work out some guidelines. That’s what we did before we got married. We’ve never had an argument about money.

@ KK. Thank you!

@ Royce. It’s a daily struggle. I have something I want to do every weekend right now in May. None of which are in town. I’m trying to convince myself to be good, but….

Hello Alicia,

Thanks for sharing a part of your financial journey. I found your story to be an inspiring model and wanted to seek your permission to reprint this on a website that I maintain. If you’re interested and would like to discuss this further, please send me an email at admin@supportblackowned.org.

Kind regards,
Khalid

Somehow, in my early 20′s I got it in my head that if I didn’t save as much or more this month, as I did last month, I was angry. My father teased me — no ethnic slur intended — that I had inherited my grandfather’s “Scottish miser” genes.

I can’t seem to make myself spend. I mean little things I don’t have a problem with, but there are big things I’d like to treat myself to, and I can’t seem to make myself part with the money in return for what I know would be a lot of pleasure I’d derive. Some of these big things are things I’ve dreamed about having/doing for years.

Can someone talk me into spending some savings on myself? I’m not young, and I’m afraid I’m missing out on enjoyment that I’ve earned.

Alicia,

Definitely max out your Roth for 2009. I would make that my first priority. Who knows what taxes will look like when you retire? Just considering TARP & Healthcare, it is a good bet that taxes will be higher by the time you retire.

Alicia, saving for the future is important but enjoying life is also important. As long as you can balance the two, go for it. I’m now in my 60′s and I often ask myself why ? Why didn’t I do more things when I was younger to enjoy life ? Why did I put so much emphasis on saving, saving saving. Now, I have more money than I will spend but I wish I had used some of that money to do things when I was younger. So, enjoy your life !!!!!!!!!!!!!!!!!

Thanks — Super Positive, Super Encouraging and Super Inspirational. That is what this blog means to me. I am saving away and feel empowered that this year my account balance is higher than it ever has been. I have also opened up my first emergency fund savings account. Considering I am in my 40′s I may be a slow starter, but better late than never. I will say because I have done so well, I treated myself to my first designer handbag. I love it and I used my own money to get it, not credit. Keep up the good work Alicia.

@ Jim. Thai in Meridian you say. Hmmm. You just made me hungry.

@ Melissa. Thank you so much. I can’t believe I’m writing about my life and how finances play into for the world. Haha.

@ Debra. It’s great that you’re starting now. I bet you feel proud every time you look at that handbag.

@ Eboni. It’s funny what we think we need. Makes you say hmmmm, right? Congrats on 10% of your income. That is awesome. In this economy, that’s got to be a comfort.

@ Lewis. Thank you. I hear that encouragement so often.

Alicia kudos! I am 71 years old and never really learned to save until after my boys were grown. I must admit that my son was the one who introduced me to ING and I guess I can say that I hope we will live happily everafter. Please keep up your writing. Your spirit really comes through and I love your sly comments. You go girl! I KNOW YOU WILL BE “INVITED” TO THE WRITING SEMINAR – if not their loss. dee

Forgive me please, if others have already offered this suggestion. While I read your whole post, I did not read all 93 comments left.

I was a financial advisor before I retired. One of the most important buzz phrases in saving is “pay yourself first”. This means to put your savings on your bill list for a specific amount each payday. If possible have it deducted straight from your check so that you won’t be tempted to spend. You are now just one more bill to be paid each month, come Hell or High Water, like your mortgage and utilities.

Where you save the money is, of course, your choice but I very strongly recommend a growth-oriented mutual fund with a good long term record in good times and bad. That means not chasing last year’s big winner but looking at how each fund performs in up and down markets. You will make *much* more money in the long run if you invest in growth stocks than if you use a savings account or a bond fund. Think *long term* and do not let the short term ups and downs dissuade you.

Good luck! I know you’ll do well because you have the right attitude!

MM

PS I was able to retire at age 45 by taking my own advice

Hi Alicia. My wife and I broke out of our small farm towns in western NY for our careers. Well, mostly because of my career. We love our jobs and make more money than we would back home, but we miss our families and family events very much. My point is there is definitely a tradeoff, unless you want to get away from family! Haha. Anyway, have you ever heard of Dave Ramsey? (daveramsey.com) If your interested in setting financial goals, his seven “baby step” plan will help you do just that. Along with advise on finding a job that you love. Its just simple, old fashion money advise that most people seem to have forgotten. You can listen to him on radio, free podcasts, or his TV show. Check him out if you want. Judging by what you have written (living debt free), your already farther ahead than most americans! Depending on how you are paying for your husband’s education, you’d probably be around step 3 – 5 already. Good luck!

Great post – you are a great writer and you have a knack for being frugal. By writing this blog, I think you will keep yourself on task to accomplish many other financial goals, good luck!

Hi Alicia !
Just wanted to comment on a great “flashback” story you wrote about. It reminded me of my youth and taking on odd jobs, and little chores around the house to earn a little cash so that I would have my “own” cash. I always felt so good when I got paid. Like I had really accomplished something. Even though I didn’t have siblings to contend with for loans( SMILE), I was the “bank” for two childhood friends. LOL! I would charge them a nickel for every dollar I loaned them. And we’re still friends to this day! When we pay ourselves first by saving money ( even the smallest amount), and developing sound money habits when young, it’s ( I think) the ideal foundation to starting out learning about finances and handling money for adulthood.
I still try even at my age (50+) to put away a few bucks, cut back on expenses, at every chance I get.
You should see my “coin change containers” (LAUGH).
WAY TO GO! The best to you, and all the others out there who really put forth the effort!