Rethinking Why I Save in 2017

It’s not the how, it’s always the why.

Growing up, the few lessons in personal finance I had were cobbled together from whatever the adults in my life told me:

Don’t use your credit card unless it’s an emergency, Dad would say.

The one thing I tell all of my students is, open up a Roth IRA account, my voice teacher would say.

Get some envelopes and on the front of each, write out a bill you have to pay. Phone, groceries, so on. And take out the money in cash every check and put it inside each envelope. That way you always have money for the bills, my aunt would say.

My attitudes around finance vacillated between apathy and fear. I grew up in a low-income household and money matters, as I understood them, were about getting by comfortably. Whenever I asked my dad for money for voice lessons or acting classes, I already knew what “No” meant: it meant no money. I grew accustomed to hearing no. My dad, who I lived with, worked two jobs and would work overtime to pad his paycheck a bit more. Every month, he’d lay out all of the monthly bills, would write out checks, and lick the envelopes shut. My dad worked long hours, and our bills were always paid.

I don’t think I consciously knew what stress he was under, but I understood that single parenthood wasn’t easy. I once starred in a television commercial and gave my dad royalty checks to help with household expenses.

It took until I was 24, returning from a Fulbright abroad and faced with having to get a full-time job, to really understand money. I’d have to live on my own and was responsible for all of my bills. That, and I wanted to build wealth.

A friend told me about the site LearnVest and I started doing my research. Roth IRA? Check. Savings? Check. My aunt’s envelope philosophy? Also check. I’d learned to save, to live on less (a lesson I’d brought with me back home from Fulbright), and how to pay stuff off. I was gobsmacked when I finally got access to my student loan accounts — $37,000?! How? And yet I worked to pay off the smaller loans. I also paid off the only credit card I had. I opted for a cheap, no-contract plan for my smartphone. An overdue library bill got sent to collections and, after learning about it on my credit report, promptly paid it off. I tracked groceries and extraneous spending judiciously for I was always afraid of “owing” someone and being dragged down by debt. This kind of thinking helped me a few years down the line, when I got laid off and lived off of unemployment insurance for a year. I’m not one of those “I paid off my $30,000 debt in 15 months!” stories, nor am I the “I saved $20,000 in two years!” stories. I’m no success story. But my saving impulse has helped me in so many ways.

I’m able to save for vacations and for big life changes, like moving (not both at once, except for the time when I got my first full time job after a year of unemployment, and took on an extra, part-time job to help pay for a trip to Chile and for my first apartment). I have a grad school fund, and I treat my bills like “savings”; basically, I have a savings account set up specifically for bills and split up the amount I pay between my two monthly paychecks, so the bulk of a bill doesn’t come out of one paycheck.

I still have a very long way to go. This year, I’d like to increase my 401(k) contributions by 2% and I’d like to max out my Roth IRA contributions. Additional money goals: completely pay off my undergraduate student loans and not take out loans for grad school (saving my own money, applying for scholarships, and an employer education reimbursement plan will help me to that end). I opened up my first ever non-retirement investment account and am, admittedly, afraid of it. Stock markets are risky, my brain tells me. People lost their retirement because of the recession. The stock market did that, the news tells me. I’d like to invest all the same. I have no illusions of millionaire grandeur; I’d just like to have options beyond a traditional savings account.

I’m lucky to be in a better position financially than I was seven years ago. For one, I earn more, but the habits that I acquired when my circumstances pushed me to be more resourceful. Still, like most people, there are places I can definitely cut back (eating out, I’m looking at you). But most importantly, I’d like to save from an abundance mindset, not one of fear and scarcity.

Stephanie Morillo is a writer from the Bronx, New York City. Follow her on Twitter: @radiomorillo

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