How to Save $1000
One THOU-sand dollars. Note the dramatic emphasis. The holy grail. Or the start at least. To emergency funds. Emergency funds to free you from vicious credit card debt. Breaking the shackles of that debt being the first nano-step down the yellow brick road of financial independence.
A cool grand. Dave Ramsey recommends it. Is further endorsement required?
(Well, yes. Have you seen that dude’s house? Conservative Fiscal Fail.)
It’ll pay for unexpected car repairs, vet bills (more likely in my case), an insurance deductible, a medical bill, a gushing (not in a good way) hot water heater. All life’s unexpected pseudo emergencies. Whatever it is that would usually have you reaching for the plastic, this little stash makes it that much easier to not. No payments over time. No interest paid to The Man. No late fees or surcharges. No bullshit. Just money when you need it.
I remember that feeling. The empowered sense of “I got this” versus the usual Oh Shit Moment. For me that was revolutionary. Birds sang. Mental lightbulb illuminated. Bill paying without dread. Who knew it felt so good? Maybe that explains my current long term love affair with the now much overgrown Emergency Fund. If we can still call it an Emergency Fund. It’s well past covering singular bills, now encompassing many, many months of living expenses. Its morphed into something else entirely. More like “How long could I be unemployed?” money. On particularly bad days of Corporate Servitude, the balance on this nest egg provides the warm comfort of a shot of whiskey.
And it all started with one thousand dollar bills. But, first you gotta save a whole army of them. If you are fortunate, windfalls are involved; tax returns, work bonuses, maybe somebody dies (but, not someone you like or knew particularly well). For the rest of us, especially if you are already in the midst of financial woes, that first grand can be painful. Slow. Scavenged. Hoarded. Scraped together over months. If you aren’t used to saving or you don’t have a lot of room in your budget to begin with, an ‘extra’ thousand can seem like an insurmountable hurdle.
But, its not. As what would now be considered a veteran saver, with my automatic withdrawals, budgeted saving, and interest rolling in (as much a whopping 1% rolls anywhere), I endeavored to save an extra $1,000. Above and beyond my current budget, without sacrificing 2013 goals or changing priorities. A thousand bucks from somewhere.
It took me over 6 months, but I did it. In June of last year, I repurposed an empty savings account, entitled it ‘Freedom’ and so the experiment began. First deposit: $4. Off like a shot. And so it proceeded, an exercise in nickel and diming myself. Only small amounts of money I wouldn’t miss. Checking account balance sit at $358? I won’t notice $350 instead. $10 Mail-in rebate finally shows up? I know just where to stick it. After that $4 rocket launch, deposits read like $8, $4, $5, $4, $10 (!!). You can see how this took so long. The biggest deposit was $136 from a windfall, with a couple $50 injections, even one $80. Unsurprisingly these were enabled by No-Spend Month. Yet, most of this mini-fortune was built in less that $20 increments.
What did I sacrifice? Funny, I can’t think of a thing. Maybe I cursed my lack of latte money at the time. Maybe I bemoaned my desire for a cuban sandwich foodgasm (for real, those things are amazing). There were certainly things on etsy I coveted, but what else is new? In any case, I probably blamed my unfortunate circumstances on the world at large. Instead of my own efforts to funnel away small amounts of cash. I often don’t connect my own actions to save with an actual lack of cash flow. Because the money’s just not there. Out of sight. Out of mind. Adapt. Adjust. Eat something yummy at home. Have another cup of drip coffee. Move on.
Maybe that’s not how you’d save a grand, but it certainly worked for me. In a slow, relatively painless sort of way. I find a little comfort in the fact, if I were starting over, back to Savings Ground Zero, with reduced circumstances and no know how, I could still do it. In that case, real life might intercede with some unfortunate incidents to tap that money before it was fully grown. Balances might slip backwards a few times. But upward progression can be made. Start with $4. Heck start with $1.
How would you save that grand? How long would it take you? And what should I spend it on? I’ve got $1,000 ‘extra’ smackers. Goals? Vacuum? Mortgage? Roll it over to long term savings? Retirement? Be responsible? Or not?