Close your eyes. Try to recall your first memory of saving money or budgeting. Me… I was 8 years old, or so I recall. My best friends and I had just convinced my mom to give us $5 so we could run to the corner store and get some candy. She made me promise to save the change and bring it back to her.

You never saw such problem solving skills in kids back then. We were determined to get the most pieces of candy for the money we were given. We wanted to know unit price, how much per each piece.

We came home.

My mom held out her hand.

I gave her one penny.

While I had mastered the math required, I still had a lot to learn about saving. I had not made saving any money a priority. To calm my mom down I said, “You never said how much to save…”

Funny thing is, that lesson haunts many of us today. We need to have a goal. Saving for the sake of saving does not motivate many of us. So get concrete. Make it real!

“You never said how much to save…”

We need to have some specificity for what we are trying to do. Setting a goal, with specific amounts and specific timing makes a huge difference. So lets call them

S.M.A.R.T. goals:

Specific

Measurable

Attainable

Realistic

Timely

To learn more about SMART goals, you can review our publication at http://edis.ifas.ufl.edu/he821.

The second takeaway from my memory is that you can’t rely on residual savings to build funds for the future. Residual savings is the money you have left over after you cover expenses. That’s because whatever we have left over at the end of the month is variable. I might see that I am ahead and eat out a few extra times. I could have a few friends with birthdays or other non-regular expenses that erode my “residual savings.”

This is all to say that residual savings should be in addition to your preplanned savings. So contribute to a retirement account, or other asset when you get paid, and then also save what is left over. This way if nothing is left over, you still put something away for your future!

So pay yourself first: automate this process through payroll deduction or an automated transfer to your savings account. You simply budget based on the idea that the money you plan to save is already spoken for… If you have kids, have a minimum 25% rule. That rule is that 10% (MINIMUM) of all money taken in whether it is a job, an allowance, a paper route (do they still have those?), birthdays. Parents can play with this percentage, but for kids 25% should be about right. However, 10% should be a good minimum goal for us adults.

It wasn’t that hard for any of us if we made it a positive thing. My son prefers any money he gets for birthdays or other to go into savings first, and then he only spends what he has to…

Want to set a goal? Make a plan? Save automatically? Then join me and thousands of other Floridians to become a Florida Saver; take the pledge and commit to your future at https://americasaves.org/local-campaigns/973-take-the-florida-saves-pledge.

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