Your money goal for March 2021 | 12 months to get good with money

Hey readers,

I’m excited for you. This month’s task will be a huge turning point, and the amount of effort is much less than when you had to make your first budget back in January. In January, you made a budget, and in February, you determined some exciting savings goals and some not-so-exciting savings goals. If you haven’t been watching these monthly money goal videos, click the links above to complete your first two goals– it is NOT too late to catch up.

If you’ve made it this far and done the first two steps, congratulations: you are already way more on top of your money than billions of people.

But don’t stop there, because your money goal for March will bring your financial life to the next level. These two small steps are a game-changer for so many people when they first start budgeting.

Here’s the goal: During the month of March, separate your savings accounts into different sinking funds AND consider automating deposits into each account.

You might be asking, what is a sinking fund? I did a whole video on these that you can check out here, but the short answer is that sinking funds are savings accounts for short-or-mid-term goals. We call them “sinking funds,” because it’s money that you’re saving consistently with a purpose of spending in the near future.

For example, I have a different savings account for when I need to replace my car, for my summer savings, for travel, and for Christmas gifts.

The magic of sinking funds is that they make spending something you truly feel like you’ve earned– because you literally have earned it. Not only did you work for your money in the traditional sense, but you created a plan for your income and stuck to it, so it eliminates the guilt that often comes with big purchases.

Let’s talk about why you should go through the hassle of putting all of these funds in different savings accounts. 

For me, this is the only way I’m certain to use the money for only what I originally intended to use it for. If I had all of these accounts bundled together in one big savings account, perhaps even with my emergency fund (and I know many people who do this, so no judgement at all), I would almost definitely lose track of what the money was meant to be spent on. 

And it’s not just me. I was coaching a friend through her finances once, and despite having a ton of money in a savings account, she was stressed out. Even when we looked at what she would need for each savings goal, including her emergency fund, travel, summer money, and everything else, and we saw that she had enough, she was still stressed. 

She had some idea that she didn’t want her big savings account to “go under a certain amount,” when in reality, she was hoarding more money than necessary. Visually separating out the accounts is key to ensuring that you’re not losing money by having to much in savings and not enough going toward debt or investments.

For your own organization, you should have them separated. One psychological hack that really helps people save is NAMING the different accounts specifically for what they’re for, like “Italy Trip 2022” or “Winter Shopping Haul.” This level of specificity is a huge motivator– especially for those fun goals! 

Now, let’s talk about automation. Automation is when you tell your bank account to directly deposit a certain amount during a specific time each month. In practice, many people send money to their savings right after each paycheck, and then have the “leftover” money be their spending money for the month.

Personally, I don’t automate my savings at all– my investments come directly out of my bank account, but I physically add to my savings each and every month according to what I have budgeted.

Here’s why I personally don’t automate: I’m always saying that a budget is a living and breathing thing, and it’s because I learned that lesson the hard way in the beginning of my journey. Unexpected expenses came up during the month, I had to change my budget for irregular expenses before the month began, I would go slightly over budget in a category, or my savings goals would change entirely for one reason or another. Life would happen. This led to me inevitably cancelling one or more automatic deposits each month, only to save a smaller amount and feel like a failure.

This was ridiculous, because I was still saving toward my goals (and making good progress, at that). But having to always adjust this thing that was supposed to be “automatic” was not truly optimal in practice.

In reality, it added more steps and anxiety, and messed with my momentum. And the kicker is: I’m saving just as effectively without the automation. It was more than unnecessary– it was actually demotivating. 

Now, that’s just my experience, and I don’t ever want to project that onto you guys when something could really help you save money. And the fact is: automation helps so many people save money who wouldn’t otherwise. I personally believe that automation is sometimes a bit of a bandaid for those who don’t keep up with their budget, but that being said, I’d rather you save in any way possible, even if it’s not in following your whole financial plan. 

If doing both is the system that works for you, by all means, budget & automate. Millions of people do.

So, once again, before April starts, separate those savings accounts and decide whether or not giving automation a shot is a good idea for you.

You got this.

🙂 Rachel

P.S.

Make sure to grab my free budget template if you haven’t already.

And if you need more guidance with goal setting, mindset shifting, and budget brainstorming, you can purchase my Money Map Workbook for just $9 –> Get Your Money Map Workbook.

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