Did you ever have an overweight and out-of-shape PE teacher? I did. And it always confounded me. I thought, “Shouldn’t he practice what he preaches?”
I had similar thoughts Friday at my big bank, at which I keep my main checking account. I misplaced my debit card last weekend, so I went in to get a temporary card while the other one headed to my mailbox.
Justine helped me out.
She asked if I had a financial advisor. Bank of America’s partnership with Merrill Edge allows me a free, short session with an advisor.
I told Justine that I, indeed, have a financial advisor. I’m actually going to see my him in a few days. I’m excited to talk about my progress so far and look toward the future.
While further reviewing my account, Justine said, “Miss Wise, I noticed you don’t have a savings account with us.”
“Yeah, I know,” I replied. “In order for me to save, I have to keep my checking and savings completely separate.”
I told her that I save at another bank. Two actually—one at a credit union; the other, online. Without the separate savings account, I would constantly be transferring money into the checking account and never keep a dime.
She said she understood.
“I try to be a saver, but I have too many bills,” she said, “They just keep coming.”
A red flag went up in my head. I thought, ‘But you work at a bank! You work with money ALL THE TIME!’
If anyone could be saving, I thought it would be her. Of course, I don’t know the ins and outs of her life. I know sometimes bills seem to come at you in quick succession.
Our conversation reaffirmed these actions I’ve taken along my journey to financial enlightenment:
- Save for “unexpected” bills. Maybe Justine didn’t see some of her bills coming. But that’s the main reason we should have savings. Car repairs, medical bills and that annual AAA renewal aren’t really unexpected. At the beginning of the year, I decided to save for those annual expenses such as the AAA card so they wouldn’t seem to pop up out of the blue. One day, I want to have enough to cover the medical deductible and major car repairs, too. I’d keep a large amount in an interest-bearing account.
- Keep the savings account separate from the checking account. It takes much more effort to actually dip into those savings if it’s at another bank. You’ll either have to drive to a separate brick-and-mortar bank or wait 2-4 days for the transfer from an online bank.
- Make savings automatic. Having my savings automatically withdrawn from my paycheck into a separate bank doesn’t even allow me to factor that money into bill money or discretionary money. If I had to decide every two weeks whether to save or not, then I would also make a poor decision—to spend the money.
- Reduce monthly bills whenever possible. Whether it’s lowering your phone bill or cutting off the cable, do what you gotta do to keep the overhead low. Then put the difference in savings.
- Get advice when you need it. When something’s wrong with your car, you see a mechanic, right? I might take Justine on the Merrill Edge offer just for a tune-up. Although I have a financial advisor, I like hearing different perspectives.
I left the big bank happy about my current situation. I not where I want to be, but I’m making good money decisions and I’m working my plan. Yay for progress!