“Is it worth trying to save money when I earn so little?”

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I’m 26 and make $18 an hour working as a pastry chef at a restaurant, which is actually a pretty decent salary for my field. (I also receive health benefits and paid sick leave.) I love my job and my colleagues, and I hope to grow in the restaurant industry. But right now it’s really hard for me to save money. My rent is $1,100 a month with roommates. Once I’ve paid all my bills – rent, phone, groceries, student loans (and before you ask, no, they’re not on hiatus because they’re private, not federal) – there’s no big left -thing. I could save maybe $100-200 a month at best.

I know I should have a cushion for emergencies. Moreover, it would be wise to invest in the future. But it also seems silly to give up the basic niceties I can afford, like a wedding present or the occasional beer or a trip to visit my family, just to save what would probably be around $1,000 a year. In other words, the difference between saving nothing and saving a fairly small amount would make me pretty miserable. And especially after the last few years we’ve had, I don’t know if it’s worth it – I want to enjoy my 20s. So how can I make the calculations add up? Is it possible to save without cutting off all the pleasures of my life? Or would it really be that bad if I put off my savings until I hope to make more money in a few years?

I get why saving up doesn’t seem worth it to you right now. Your efforts would be totally disproportionate to the results. Sure, you could spend the rest of your 20s saving and racking up a few bucks here and there, but you’d miss weddings, birthdays, dinners, and drinks with friends, family, and co-workers — and you wouldn’t. would only have a few thousand dollars. show for it. This amount is nothing to sneeze at; it’s more than many Americans have on hand. But if it comes at the expense of important relationships and milestones — not to mention your basic enjoyment of life — what’s the point?

However, saving a little is better than saving nothing. And the habit of saving is the most important of all. That’s why you should focus less on amount you also save on the usual practice of putting money aside, even if it’s not much.

This probably seems counter-intuitive. Most of us think that goal setting is a crucial part of self-motivation – a specific dollar amount gives us a shiny goal to work towards. But researchers have found that’s not true, and it can even backfire when people don’t reach their goals and give up. In a studypeople who did not meet their monthly savings benchmarks ended up spending Continued than those who didn’t set goals at all because once they failed, they threw in the towel and spent with abandon. (This is also known as “What the Hell Effect” – the human tendency to completely fall off the wagon once you stray from your resolutions, such as finishing the whole box of cookies after giving in and eating one. .)

What else, studies find that abstract goals – like “saving more” or “investing for retirement” – can also be doomed to failure. Indeed, more immediate priorities will always trump vague future needs. You’re not going to skip a good friend’s birthday dinner just because you might want that money for a hypothetical emergency years from now or to pay for a nursing home at 90.

In place, psychologists have discovered that people are more likely to save money if they make it part of their lifestyle, regardless of income. This is similar to any good habit: the best way to keep doing it is to make it doable. Just like you’re not going to run a marathon if you hate jogging, you’ll never save money if it keeps you from spending important time with loved ones. So you need to find a way to make saving more rewarding and less disruptive to your life. This should not exhaust your willpower.

The good news is that there are plenty of tools out there to help, says Kyle McBrien, certified financial planner at Betterment, a financial advice platform. “Automating your savings is a great way to do this without feeling like you’re depriving yourself,” he says. “Getting started is the hardest part – the first $1,000 is always the hardest, but know that it gets easier.”

Many people (including me) automatically deposit some money into a separate savings account each month, ideally when their paycheck first arrives so they don’t even miss it. You can try that, but there are other ways to make saving even more progressive and sneaky, including apps and debit cards that will round up all your purchases and put the spare change into a savings account or of investment. To save money, you can try Qcapital Where Carillon; to invest, consult tassels or the Robinhood payment card. personally i use Figure, which withdraws money from my checking account every day and accumulates it in a separate account so that I do not know it. (Some of these services incur fees, up to $2.99 ​​per month, so do a little research before deciding which one is right for you.)

These tools are a good way to get your savings off the ground. You probably won’t save a ton, realistically, but you’ll amass something and prove to yourself that you can. Once that happens, the next step is to develop a larger savings plan or strategy, such as building up an emergency fund and starting to invest.

I’m not going to claim that by changing your “money mindset” or making minor changes to your lifestyle, you’ll be a millionaire at 35. It would be wrong. In reality, there are only two ways to save at a higher rate: you have to spend less or you have to earn more. Right now, it seems like you’re in a rush from both sides here, especially when it comes to spending – you live frugally, and cutting back on spending any further would make your life a lot less enjoyable. You also say you love your job, which is great! But if you want to become financially secure (meaning save more), you’ll probably need a higher income.

I know you are paying your dues in your industry, and that is admirable and I hope it pays off. But if there’s a way to supplement what you earn even a little – walking your dog, catering, babysitting, etc. – so you can cash in on the extra dollars, it could be the difference between dealing with an emergency (a costly medical bill, for example) and going into debt because of it. In addition, it could allow you to invest and profit from compound interest overtime.

(Another suggestion: Many private lenders are offering student loan breaks right now, even if they don’t freeze payments entirely. It’s worth calling yours and seeing if they can lower your bills. monthly for a while so you can cash in that extra money instead.)

In addition to saving money, McBrien advises you to consider creating a Roth IRA, which is a type of retirement investment account that can save you money in taxes and allows you to withdraw money after five years (unlike most other retirement accounts, which penalize you if you withdraw money before reaching retirement age). It’s a great option for a young person who doesn’t have a retirement plan through their employer, which seems to be the case for you.

Consistency is key here, but at the same time, don’t panic if you backtrack sometimes. Remember that at this point habit is more important than quantity and you are playing for the long haul.

About Jonathan Bell

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