A CPA Shared the Secrets of Saving With Me (And Now I Share Them With You)

I work in an office of professionals. It’s the kind of office where everyone knows what a 401(k) is except for the 23-year-old who recently purchased his first hairbrush (that’s me). But I recently had the chance to catch up, because last week a CPA came to our office to give a presentation on smart spending and money management. CPA stands for Certified Public Accountant (I Googled it).

I went to this presentation hoping the CPA was going to give me some sweet insider secret on how to save money and then make that money become more money. Instead he explained simple things that a person can do to build savings and prepare for a more stable future. My only real vision of my future includes rocket cars and moon colonies, so I knew I was in the right place. I was prepared to take notes.

Theoretically, I know how to save money: Don’t spend all of your money. And yet, every two weeks, I find myself without any money. I have no clue where it goes. I make $35,000 a year, which, to me, is a lot of thousands of dollars a year. But where does it go? Not big things—I could count the purchases I’ve made over $100 dollars in the last year on my fingers (ten). I don’t have a ton of bills. Rent is my main expense. I pay $900 a month, which is actually sort of modest for Washington, D.C. standards, but still seems really expensive by the “my parents recently stopped paying my rent” standards that I use.

He started by telling us that 90% of lottery winners blow their money in five years and that 60% of NBA players are broke within ten years out of the league. He meant to shock us and to make us think about how we spend our own money. It just made me think about Antoine Walker.

Then he started the steps. The first thing to do to get on the path to financial security was to save $1,000 “for any emergencies that might come up.” While the rest of my office waited for him to move on to the next step, I scribbled into my notebook “SAVE 910 MORE DOLLARS.”

The following step was to pay off all of our credit card debt. He said having credit card debt is a waste of money. So I wrote “FIRST PAY OFF CREDIT CARD DEBT” and then, “HOPE FOR NO EMERGENCIES.” He also advised us to avoid using our credit cards unless we can pay the balance in full each month, a tip I was familiar with, as it was what my mother told me right before I used my credit card to buy a ticket to a music festival that Jay-Z curated.

The third step was to save $3,000, and that is when I sort of stopped listening. If I ever get to a point where I’ve saved $1,000 and paid off my credit card, game over; we certainly will have reached some sort of post-apocalyptic world where “dollars” means something else entirely.

The rest of the steps were about saving for a mortgage and your children’s college funds, so I drew pictures of astronauts in my notebook.

My biggest takeaway was that no matter how much I save, there will never be a point when I’m going to look at my bank statement and say “I did it. I’m all done saving. Let’s go take our hover cars to that picnic on the moon.” I’m going to have to save forever. I’ll never be able to take a sip of a $9 microbrew again without hearing 80-year-old Zach in my head, begging me to drink a High Life occasionally.

I’m prepared to start saving for my future, to be a grown-up responsible adult man who saves money. But and right now I’m sipping on a $5 latte and just paid for wi-fi, and last night I stayed up until 2 a.m. watching YouTube videos of animals.

Maybe I’ll just win the lottery and have a fabulous five years.

 

Zach Kohn is an unsuccessful comedy writer and a sort-of successful advertising assistant. He sometimes tells stand-up jokes in Washington, D.C. Other times he writes them down on his Twitter.

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14 Comments / Post A Comment

That’s where I struggle as well–there’s no end in sight! Even if I get rid of my consumer debt, which is a staggeringly high sum to me, I still have student loans, and I haven’t even paid my first mortgage payment yet (aside from the closing costs). I also make around $35K and it just seems like I’ll always be treading water, never actually getting to shore, or whatever the rest of that cliche would be.

hershmire (#695)

It’s like you’re writing my bio. Yes, they always say the first key to savings is having a clear goal in mind. But I feel like our generation is pretty certain that there’s going to be an apocalypse in the next 20 years. And if not, either any money we save will be completely outpaced by unchecked inflation or our health and retirement expenses will be so high that “10% out of the paycheck” will never cover them.

So I’m making a mental map of the warmest dumpsters in my neighborhood.

mishaps (#65)

@cdarcy uh, EVERY generation is pretty certain there’s going to be an apocalypse in the next 20 years. So far so good, though!

wallrock (#1,003)

Hindsight being 20/20 and all, the best thing I did was to start saving from the first moment I had a job and treat that percentage as inviolate. I treat my savings account like a loan shark that would kneecap me if I miss a payment.

wee_ramekin (#1,246)

Re: savings, here is my tip.

First, create a savings account. It’s a lot easier to save money when you put it in a dedicated account, rather than having it all sloshing around in one account. [This actually leads to a somewhat unrelated piece of advice: create a separate checking account for your bills. Have your company's accountant direct deposit half of your money into your 'Bills' account, and half your money into your 'Regular' account. This will help prevent the "Holy shit, it is time to pay rent and I did some wack math in my head when looking at my account balance and now I have to borrow $200 from my boyfriend" trap that we all fall into at some point or another.]

Then, every time you get paid, ON THE DAY YOU GET PAID, take a dedicated sum from your checking accounts and transfer it to your savings account (if you get all your accounts with the same bank, you should be able to do this online for free). It can be as little as $10. If you get paid every two weeks, that is $20 a month.

Pretty soon, the amount will start to build up, and if you do an amount that is comfortable for you, you won’t even miss the money you put into savings. You may find that you want to put even more money in than you originally thought would be comfortable for you (“Wow, putting $10 in every two weeks is easy…maybe I’ll up it to $15!”). I started at $50, and now I’m up to $75. Soon (as long as you don’t raid the account), you will have savings!

@wee_ramekin I do this! I created three savings accounts (Future stuff like buying a house (Hahahahahahh!), emergency fund, wedding) I automatically transfer $25/month into the emergency fund and wedding savings accounts no matter what.

BUT I get paid once a week, so I check my account every Friday…When I see the influx in my checking and how piddly my savings looks in comparison, I feel compelled to transfer just a bit into each, so I do. The rush is very similar to the rush of buying, say, a new lipstick. I looked back over the past few months and it turns out I’ve saved almost $1000 (total) this way!?!?!?!?! My contributions sometimes go up to $250/month (total) but are always, always at least $25/month. It works for me!

allreb (#502)

@wee_ramekin I do similarly — I don’t have a set amount, but at every paycheck I stop to look at how many more bills I have to pay that month, any other big expenses I know are coming, and give myself some money for spending/entertainment (I am lucky enough to get paid enough to do that!) and transfer a big chunk of anything left in my checking account into savings. And seeing the level of the savings account tick up-up-up gives me an unreasonably huge feeling of accomplishment.

mishaps (#65)

@wee_ramekin yes! even better, AUTO-PAY yourself. You can save without paying attention!

@dj pomegranate You might be interested in ImpulseSave.com. It’s bascially: set a goal, set how much you want to auto-save each week, and then you can save more via text/app/website. I joined in April-ish and have 3 goals–a CC payment (started at $800 goal but moved to $500 because it was taking forever), a Wii for my mom ($150) and a pair of diamond earrings ($115). I have already reached/cashed in the earrings goal (but ended up using it towards a Kindle Fire instead), have $20 towards the Wii and will hit my goal in December (just in time for Christmas!), and have $370 in the CC fund. There are charts & people can comment on each other’s saves (but you can’t see how much people have saved). It’s pretty fun, and I definitely like seeing that money grow each week.

Zack Cohn needs to do some research on financial savings. This is a disgrace to see what children these days believe about rocket cars! That’s why I’m voting for Rick Santorum 2012! If my uncle ever acted the way kids today do, the world wouldn’t have chicken nuggets!

Unless your CPA is a grizzled veteran, he can’t help you make money out of money. Savings are their (our) game.

Savings, however, have to come from you executing. wee_ramekin is spot on, just do it. Get the savings out of your main account (“pay yourself first”) as soon as possible.

wee_ramekin (#1,246)

@nomorecrackpipes I think another important thing to note is that you don’t have to sock away a large amount with each contribution to your savings account. Even if you only put $20 a month in savings, at the end of the year, that’s still $240 that you saved. Perhaps that seems like a piddling amount, but it’s better than $0 saved! Ain’t no shame in that, sisterfriend. Plus, once the saving bug bites you, you often begin to stash away more and more money.

Meaux (#943)

I frickin’ loved this. That is all.

kmax (#1,263)

ZACH KOHN

Just to let you know, your CPA got all of his tips from Dave Ramsey. He details all of these “secrets of saving,” from the $1000 emergency fund to paying down debt first to saving for your kids’ college fund, in his very successful book, “The Total Money Makeover.”

I’m not sure what writing ethics dictate, but I do believe Dave Ramsey deserves credit, not your mystery CPA.

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