Making Frugality a Habit
Weaving a financial safety net is not just about covering yourself in a crisis. “It’s also about being able to get ahead,” said Jennifer Wheary, a senior fellow at Demos, a nonpartisan public policy research group in New York. Ms. Wheary is the co-author of a report released in November: “From Middle to Shaky Ground: The Economic Decline of America’s Middle Class.”
Most people’s economic stability depends on a variety of factors. Right now, with so many people facing multiple sources of financial strain, “it’s even more important to have that cushion,” Ms. Wheary said.
When you are stretched thin, it can feel impossible to save — and yet that is when you need to make sure, somehow, that you do, she said. Among the families surveyed for the study, 75 percent “couldn’t survive for three months, if they had to do it on savings alone.”
My husband and I could easily be one of those families. Every time our emergency fund hits the one-month mark some crisis strolls along and gobbles up our funds. Then we start over. Now, I am determined to save the $15,000 that would cover our family’s most basic needs for at least three months.
A few tricks that might help. Start by finding a specific chunk you can save — perhaps cutting back cable, quitting smoking, renting out the garage or limiting spending on restaurant meals.
THEN do an end-run around your own inertia and use automatic transfers to deposit a set amount — $100, $200 or $300 — every month into an account not linked to your checking and definitely not accessible by PIN or with any piece of plastic. The first time I tried this, I saved $3,000 so fast it made my wallet spin.
Comment: Little steps: Automatic savings transfers, freeze a credit card (put it in a locked box), bagging lunch, dinning in a Friday night, driving less. All these help.