You Still Have To Save

I wear corrective vision lenses. My vision started to decline when I was in college, so I got glasses. At first I only had to wear them when I was sitting in the back of a lecture hall or driving at night so it wasn’t that inconvenient. Over a very short period of time, my vision deteriorated to the point where I needed to wear the glasses all the time. I was finally convinced that I needed to move to contacts when I realized how problematic the glasses could be. I know lots of people wear glasses with no problems, but I wasn’t one of those people.

I tried out ROTC one semester in college. I decided not to enlist when I was offered a full-ride scholarship for the rest of college. I know, it doesn’t sound like it makes much financial sense, but I wouldn’t have been able to be in the reserves if I accepted that scholarship, I would have had to have gone active duty once I graduated, and I just didn’t want to do that. But for that semester, I had PT (physical training) every weekday morning at 5 AM. It was really cold most mornings, so we’d come in from running and my glasses would fog up. So I’d take them off while we were doing the floor exercises like sit-ups and push-ups. One morning I had to miss my classes for the rest of the day because my glasses got stepped on while they were lying next to me. That did it for me, well that and vanity. I ordered contacts that night when I got my glasses repaired.

I’ve never really been comfortable with contacts either though. I get dull headaches on a pretty regular basis. Of course it doesn’t help that I wear them from about 5 in the morning until almost 10 at night. So I decided that I wanted to look into corrective vision surgery. I am slightly nervous about it, after all there are risks associated with any surgery, and other than inconvenience, there aren’t any real risks with glasses or contacts. But my eye doctor was one of the first to start doing the surgeries in the area and so has tons of experience and a really good track record. The next obstacle was of course the money. It’s a fairly expensive procedure, but other than having to pay for it all at once, it’s actually cheaper long-term than purchasing contacts over my life-time.

After deciding that I wanted to pursue this option, I made an appointment to find out if I was a good candidate for the surgery and exactly how much it costs. I am fortunately a good candidate for the surgery, and after saving money for nearly two years I now have enough money to pay for the surgery.

I’ve had several people at work say to me, “Just use your flex account.” They are referring to the IRS-approved flexible spending account program that allows us to set aside tax-free money to spend on eligible medical expenses. This is a great option to save a little money, and I will be using it. However, because I live on a budget and my checks will be smaller after the money is withheld for the account, I still had to save for it.

I’ve written about saving up and delayed gratification before here. Even if you can find an alternate financing method, whether it’s a flexible spending account or a line of credit, it’s still a good idea to save first for anything that isn’t an emergency need. This coming fall I’ll be getting the surgery done and will know that it’s paid in full when it happens.

Another Benefit of Delayed Gratification

Practicing delayed gratification is one of the most important tools to assist you with successful money management. By saving up in advance so that you have the money for the things you need before you purchase them, you keep yourself out of bad (unnecessary and providing no long-term gain) debt. The other thing that delayed gratification does for you is to allow you time to cool off. I’ve found that there are times that I’ve decided I really want something, but by the time I’ve saved up for it I realize that I’ve gotten along this far without it and don’t really need it.

So now not only did I avoid going into debt, but I’ve also managed to increase my savings rate. Two for the price of one, always good in money management!

What if I Don't Have Enough Money?

A question I frequently hear is, “what if I don’t make enough money to cover my expenses? How do I save, how do I avoid debt?”

Most people probably have more money than they actually realize. The first step would be to look at how much money you’re spending on non-essential items. When you start tracking your money and where and how you’re spending it, it can sometimes be surprising how much you actually spend that you weren’t even aware of.

The next thing to look at is what you have defined as essentials. Are some of the things that you spend money on really necessary? Right after I got out of college and wasn’t making much money, I decided that I wouldn’t have cable television. Although I definitely wanted it, I knew it wasn’t necessary and decided that it wouldn’t fit into my budget. What types of services or items are you purchasing that aren’t totally necessary?

It’s also good to look at how much you’re spending on your essential items on a regular basis. Make sure not to get complacent with your service charges, shop around and find the best deal. Can you save money by bundling your insurance, or switching to a new company? One note on this, make sure you don’t switch to save money if the new service doesn’t meet your needs; notice that I wrote find the best deal, not just the best price.

Practice delayed gratification. When you find something that you want, it can be really hard to wait to purchase it. But it’s much better in the long run to save up and wait until you can afford an item than to get into debt. See this clip from SNL called “Don’t Buy Stuff You Cannot Afford.” It sums this point up beautifully and comically.

If you are one of the few who truly cannot pay for your basic needs you’ll need to look into other options. Find out if you’re eligible for any aid programs, get a roommate to help with rent or the mortgage, try to find a job that pays more even if it isn’t your first choice of work. But most of us can use the tips in the previous paragraphs to find more money than we ever realized we had.

The Secrets of Successful Money Mangement

There are really only two things that you need to know to successfully manage your money:

1. Know how much money you earn and how many bills you have to pay (a.k.a. "budgeting"). Most of us have heard the old adage that you shouldn’t live beyond your means, spending more money that you earn. Easy to say, not always so easy to do. Knowledge and planning are what allow you to heed this oft-given advice.

2. Delayed gratification. If your water heater goes out, it's probably a good idea to accept some debt so you can get it repaired and not go to work with hypothermia or unkempt. But if your old television set works perfectly fine but you really, really want that large-screen LCD crystal flat-panel set, you should probably wait until you’ve saved up enough money to buy it rather than purchase it on credit.

If you can make a realistic budget and stick to it by controlling your spending and saving up for new purchases, vacations, etc. in advance, you'll be well on your way to successfully managing your money.