Last week, as I met with a friend down in the city, she was talking to me about my savings plan that I talk about in Put Your Budget on a Diet, where I put every $1 bill I receive back as change into savings. I call this “The One Dollar Plan”. It’s simple, but effective.
She was dismissive.
“I don’t see how that’s going to be enough to make a difference!”
I know the feeling. I do.
I like to look at the long term. If I know I will need to get to a certain spot by a certain date, I will figure out how much I need to save by then. Oh, wait, I don’t have enough to put that much into savings, I’ll realize.
do I did I deal with this issue in the past?
I’d not put anything into savings. After all, my best is not going to be good enough.
The Key Question
If you’re thinking that putting aside every $1 bill and any loose change into your savings account is not enough, then you need to ask yourself the question, “How much are you putting into savings right now?”
When it came to my friend, the answer was that zero was going into savings on a regular basis. Not a surprise. That’s the answer most people give. All five of my test readers said the same thing. Four of them are half way to their emergency fund goals just from having the $1 plan in place for three months, after realizing the simple fact that $1 is more than $0.
Let that sink in. Say it to yourself a few times.
One Dollar is More than Zero Dollars.
Stick it with a sticky note in your wallet if you have to.
We know we need an emergency fund, but when we can’t put what we think we should into it, what we think would be enough, so we don’t put in anything. We know we should save to replace our cars, but we don’t put anything aside for those either.
Here’s what I told her, and what I’m telling you: $1, if that’s all you’re putting into savings, is still more than Zero.
The Habit to Build
For our family, though we didn’t realize it at the time, the value of putting even a dollar into the savings account went well beyond the dollar we were setting aside for emergencies. As I look back on this habit of saving, I am able to see the truth. It’s not about what is and is not enough, especially if you’ve grown up as I have as part of the generation that spends everything we earn plus going into debt for what we think we should have over and above our income.
The act of saving all loose coin and all dollar bills was not as much about the amount we were putting into the bank, and whether or not it would be “enough” for our goals. Not at all.
The act of saving even a small amount was more about building a habit of not spending everything I had in my wallet, and then some.
When my husband and I would decide that I’d have, for example, $100 in grocery money for a certain week, he often teased me that I’d somehow manage to spend $102.67. No kidding.
Most of my friends would say I was frugal, so I felt it was okay that I always went a dollar or two over. I was doing better than most people. Two dollars isn’t going to make a difference. Two dollars is hardly enough to make a difference.
But, that wasn’t the point.
There was a habit there, whether reasonable and understandable or not, of spending just a little bit more than I had budgeted and then saying, “Oh well, I’m still doing pretty good compared to most people”
When I got into the habit of putting every individual dollar bill and coin into a separate part of my wallet and then into my savings account as soon as shopping was over, I was building a new habit. A better habit. This habit may not have been enough to become financially free in six months, but it was a new habit that was breaking the old habit that would keep me from ever becoming financially free. It was the habit of spending less than budgeted.
Worrying about whether or not it would be enough was just an excuse. A form of procrastination. Sometimes it was even a pity party about not having enough.
I’ve learned that if you think what you have is not enough, it never will be.
The habit not only helped us get used to not viewing the amount in our wallets as what we get to spend today but it also surprised me by fully funding my emergency fund in under a year….$1 is more than we realize. It is enough.