Are you one of those women who spends everything you make? You earn enough to pay your bills, and even have some left over. But instead of saving it, you spend it.
Here’s something you may not want to hear: having enough money to retire when you want to is about making a plan to live below your means.
I know. I know. Living on a budget doesn’t sound sexy.
But you know what does?
Having plenty of money in savings, no debt, no car payment and owning your home out right.
Now that is sexy.
The Allianz Women, Money and Power Study (2007) indicated that 62% of women wish they had done more to prepare for their retirement. More than half (55%) wish they had saved more money and had started saving sooner.
As a financial advisor, I’ve met with women who earn $100,000+ annually, yet have little to no savings because they spend it all.
On the flip side, I’ve met with women who live a comfortable lifestyle on an income of $40,000 to $50,000. They own their own home, have multiple savings accounts and no debt other than mortgage.
So my question to you is why don’t the women on higher incomes save money while the women on smaller incomes can?
The answer: they spend everything they earn, but the savers live below their means.
Would you like to know the best way to find the money to save for retirement?
Set a lifestyle ceiling on your expenses.
Your lifestyle ceiling is the amount of money you allow to go out for expenses, debt payment, incidentals and splurging. Decide on the amount of money you will allow yourself to spend each and every month to cover your expenses.
To determine your lifestyle ceiling amount, start by writing down everything you spend for the month. Then make a commitment that you will not spend over your lifestyle ceiling amount – NO MATTER WHAT.
The excess amount (your take home pay less your lifestyle ceiling) is the amount you will put into your savings at the beginning of the month (or as soon as you receive income).
Do not “wait to see” how much you have left over after you pay your bills. You tried that, remember? It doesn’t work.
This is a NEW money discipline to help you reach your savings goals.
To really lock this in, you can arrange with your bank to have the excess automatically moved to your designated savings account, which can be a regular money market account, or an Individual Retirement Account (IRA) or Roth IRA if you qualify.
If you want to get serious about saving more money, do this now. Pick up the phone, go to your online bank account and arrange to have your excess moved into your savings account starting this month.
Even if you need to start small and increase the amount over time. That’s better than waiting.
Women who save find pleasure in saving and the spenders find pleasure in spending.
But spending does not build wealth. And financially empowered women are proactive about building wealth.
Which one do you want to be?
If you want to be a financially empowered woman, orient your thinking around living below your means. In order for you to sustain a habit of saving, you will need to associate pleasure with saving.
Replace going to the mall with another more meaningful pastime, like increasing your financial literacy. Instead of mindlessly spending money on more stuff, ask yourself, “Is this something I really need? Or is it something I can live without?” Or do what I do, wait 24 to 36 hours before making a purchase to see if you really really want it.
Cultivate a habit of living below your means, find pleasure in saving, and you’ll be well on your way to financial wellness.
It’s not too late to get started and the sooner you do, the better.
Here’s to saving more money for your golden years!
Hello, I’m Patti! I’m a Christian Life & Money Coach, Ramsey Solutions Master Financial Coach, Health Coach, writer, and former retirement planner. I’m also an award-winning co-author of She Writes for Him: Stories of Resilient Faith (Redemption Press), and prayer warrior, serving on the prayer team at my local church.
My mission is to provide inspiration, coaching, tools, and resources to help you claim all the goodness and abundance God has for you.