As the saver in a family of spenders, I decided to stop enabling my husband and sons’ poor financial habits about a year ago. According to a recent article by Yahoo Finance, a survey about Americans’ savings revealed an ugly truth. A national survey found one-third of people in America are making “good” or “excellent” progress with savings, but a majority 2/3 of Americans say they are making “fair” or “no” headway. While I live within my means, my children and husband tend to live beyond their means. Every time I saved money for them, they ended up spending the money on frivolous games, hobbies and entertainment.
Encouraging them to budget
After I stopped funding their savings accounts with extra money I earned from working overtime, I gave them a few pieces of financial advice. I didn’t expect any of them to listen. I suggested they write down specific purchase goals such as $100 for a new game. According to the recent survey that was commissioned by several groups including the Consumer Federation of America, only half of people have savings plans with specific goals. People who crunch the numbers are more likely to reach their savings goals. Once I stopped funding my sons’ savings accounts, they eventually began to pick up where I had left off.
Automating the savings
My husband found it easier to set up an automated system for saving. He had $100 of his paycheck automatically funneled into his savings account. Since it was his hard-earned money, he wasn’t as quick to spend it. I noticed he also started saving for retirement. He had his company hold back 6 percent of his paycheck for the 401(k) plan. According to one of the surveys cited in the Yahoo Finance article, 31 percent of consumers have no savings outside of their retirement savings. My husband admitted he depends on me to pay for financial emergencies. My sons also turned to me to bail them out.
Paying down debt
I also talked to my children about saving on interest charges by paying off debt as quickly as possible. My son took a closer look at his credit-card statements and figured out how much money he was wasting on interest. After he paid off his debt, he continued to pay the interest charge. Instead of sending the $20 to $30 to the credit-card company, he paid it to himself. In just one year, my children were able to build up a savings account of $500 each. I also stopped paying off my husband’s credit cards, which motivated him to stop spending as much.
My husband has gradually built up a modest retirement account that will generate us additional income when we are older. He adopted my strategy of pretending to be poor. He simply forgot about the money that was automatically for savings taken out each pay period. Although everyone hated me when I first stopped funding their pseudo savings accounts that were really spending accounts, they aren’t angry anymore.
More from this contributor:
Getting Finances in Order before a Layoff
I’m Still a Credit Deadbeat
I Tricked my Family Into Saving