A few years back, we were in terrible financial straits. I didn't know how we were going to pay the bills in a given month, and we were behind in payments on everything! A fair sized chunk of our debt was on amounts owing for missed payments on rent, utilities, car payments, and insurances.
I did what I thought was best at the time, and went to the bank. Surely they would be able to help me. They deal with money and debt every day, right? Short of a loan (which I wasn't asking for), they should be able to provide me with some advice or tips or whatever to help me get out of the predicament that I was in. Naive, huh?
Although the money management specialist I talked with was unable to help me at that time, she did mention something that I totally blew off the second it came out of her mouth. "Whenever you have a car payment to make, put an equivalent amount in your savings account for those months when you are in the low end of your income."
What the heck good was that going to do for me? I needed to figure out how to make up what I was already behind in, and I needed to do something fast!
Eventually, I did what was necessary, took a few hits on my credit report I'm sure, and started clawing my way out of the hole we were in. Bu that absurd piece of advice never left me. It's been lingering in the back of my mind for a couple of years now.
I found a link to another blog post in which the author talks about putting an equivalent amount into savings that she spends on luxury/treat items. What a fabulous idea! For each of us, we would have to define what a treat item or luxury item is. The benefit would be two-fold, as one would have to both cut down on spending AND increase savings!
Kinda of like the absurd idea my crazy banker lady told me so long ago.
I'm hankering with this idea, and how it would work for us in our house. We must, must, must increase savings, but I'm terrible at not touching those accounts. If I were to put those amounts into a locked-in account, like my RRSP, then I wouldn't touch them. The benefit would definitely be that I would be putting away for my future and working on my Yearly Financial Goals at the same time.Win-win.
Keep an eye out sometime later in the month for another post about this. I feel a personal challenge coming on!