A few weeks ago, I wrote about my personal New Years “resolution” and how I planned to do GYST days. Throughout the year, I plan to take the time to learn about budgeting to save, managing self-care, developing my professional life, and learning to cook. Every week won’t include an incredible new skill or realization, but I want to use these days for self-betterment and cleaning out my to-do list. The first day was spent learning about what other people use their GYST days for and doing some basic cleaning out my closet. This went pretty well, but the way you know if the resolution is going to stick is whether you go back again!
This week I was hoping to look into my personal finances. I, just like most everybody else here, took my required economics course and got the heck out of there. Money rules don’t make sense to me unless you’re talking supply and demand. Because of all this, I was hoping to find the simplest possible method of budgeted savings. What I found was a YouTube video called “How to Save an Emergency Fund.” Most of the time budgeting is full of fancy categories or complicated spreadsheets. This seemed to simplify it to putting money in a separate account for emergencies. For the expensive pieces, it won’t be a complete solution; but it will help chip away at it!
Within the first minute of the video, Chelsea Fagan says, “If you do not have an emergency fund, you’re not allowed to do anything else with your money, including paying back loans, until you have one.” My thoughts were: Whoa! Take a step back there! I just wanted to work on my savings, not be told what to do or have another reason I can’t call myself a real adult.
I started googling around to see if anyone else had used this phrase because I wasn’t so confident in my choice for spending my GYST day at this point. It turns out that this idea of a fund to cover you if you lose your job or need a major car repair is super common. Investopedia defines this as, “An account used to set aside funds needed in the event of a personal financial dilemma, such as the loss of a job, a debilitating illness or a major expense. The purpose of the fund is to improve financial security by creating a safety net of funds that can be used to meet emergency expenses as well as reduce the need to draw from high interest debt options, such as [credit cards} or unsecured loans.”
When I continued watching, it made sense. Almost half of Americans are one $500 emergency away from financial ruin. I can’t help but wonder if grad students make up a lot of this. So, I began planning. While my parents can help me out in an emergency, independence seems like a pretty good goal on this GYST day. I made a new savings account at my bank and got rolling.
From there I can break down what I did into 3 simple-ish steps:
1. Determine how much you need to save. For me, I don’t have too many day-to-day or month-to-month expenses. I picked a number based on what I see being possible in the next couple years. That number was pretty random if I’m being honest.
2. Look at your paychecks. No matter how small, saving what you can from these will help you to build the account and will motivate you to do more. Look at your current spending. Even if you’re not working, (being a student is a full time job!) looking at all the times you order Chinese food or pizza can help you to see if skipping that once a month could help with your new goal.
3. Watch the savings pile up. Or on the other hand, don’t. It might be like watching grass grow or paint dry.
Chelsea said later in the video, ”You shouldn’t be good with money because you want to be rich. You should be good with money because you want the freedom to live the life that makes you happy.”
While not nearly as immediate as a donations pile in the corner of my room or a beautiful planner page, I think this financial decision from my GYST day was pretty good. Now, all I have to do is keep with the plan better than my workout schedule.