I think we can all agree “money talks” in everything we do. So why is it so hard to talk about personal finances? For many, talking about money especially personal finances is a taboo topic. It can be a hard to share one’s finances with others. It can make you feel vulnerable and yet it’s one of the most important conversations you can have. And then there’s adding the importance of savings into the mix. In this blog, I’ll focus on talking about savings and how it doesn’t need to be a taboo topic.
One way to discuss savings is to relate it to your financial goals and then use it as a path to help you reach them. Future goals vary in time, long term to short term, and how much money is needed to accomplish those goals. Setting a goal can keep you motivated to save. It makes it less abstract and puts value to it. It also creates a more natural way to start talking about why savings is important. Below are a few different types of savings and how to start the conversation to reach your savings goals.
Emergency savings is important to personal finances. A good rule of thumb is to have 3-6 months of monthly expenses put back for an emergency. I know this can seem daunting however with planning and starting small, it can be done. First, begin with your personal budget. Examples are monthly income, monthly expenses including but not limited to rent, food, utilities, phone, insurance, car, and debt payments. Second, using your budget as a guide determine how much to set aside for savings and then what your goal amount is. Finally, consider setting up an automatic transfer or deposit into a separate account to start saving.
💡 How to Put It Into Practice: At the beginning of the year, discuss with your spouse/partner/family what can feasibly be allocated towards emergency savings per month. Review with your family every quarter to check your emergency fund progress.
Periodic Expense Savings
Another way to talk about savings is relating it to periodic expenses. These are expenses that happen regularly but not every month. Examples include car repair, gifts, annual taxes. Talking to your household about how to plan for these expenses is another way to focus on savings. For example, with the holidays around the corner think about what you can afford this year and then work on a spending plan to help you save for the gifts.
💡 How to Put It Into Practice: With the change of seasons, look at the new expenses in the coming months with your spouse/partner/family. Review how much you can spend for the entire season and put the funds into a separate account. If you’re single, use this time to ask a trusted family/friend how they prepare to cover periodic expenses and ask if they have any tips to reduce the costs.
If you plan to go on a vacation, which can be fun to plan, it can lead to talking about saving money. The discussion should be with everyone going, family and friends included. Having the goal in mind not to rely on a credit card to fund it. Planning and savings is vital to a vacation. Plan out how much to allocate in savings and then where those funds will be held so you don’t use them for another reason.
💡 How to Put It Into Practice: Start planning with your spouse/family/friend at the first of the year your vacation goals. Then determine what’s needed to put into savings every month to reach the goal(s). If you’re single, use this opportunity to share with a trusted family member/friend your vacation goals for the year. If you’re comfortable, you can also share the ways you’re going to make room in your budget for the savings.
These are just a few examples of how to start talking about savings in a more natural, concrete way. Conversations are often most successful when you can be open and honest, not only about your goals but how your finances are directly related to them. Apprisen is here to help you start the conversation. We offer a safe, non-judgmental space where you can share your goals with us. In our Financial Health Plan, we will help you create a personalized plan and budget to help you reach your goals. You can also follow us via Twitter, Facebook, TikTok for additional information and personal finance tips.