Developing a Savings "Game Plan"

Eunice Diaz, a teacher in Colorado Springs, had been noticing a pattern. Despite the fact that she and her husband were “making good money,” they were spending their entire earnings and “were still struggling at the end of the month.”

So, when Diaz saw an America Saves article about “paying yourself first,” she decided to make some changes.

Diaz went online and, through the America Saves website, found Colorado Saves. After enrolling as a Saver, Diaz got started saving by purchasing a certificate of deposit that carried a penalty for early withdrawals. As someone who would empty her savings to pay for non-emergencies, it was exactly the sort of product she needed.

Diaz also entered a Colorado Saves contest and won the services of a financial planner for one year, for free.  “I think I put in the best plea for help,” Diaz joked.

Working with a financial planner from Money Management International, the non-profit organization that leads Colorado Saves, the couple started off by assessing their finances. The couple saw they “didn’t have a game plan,” said Diaz. “If we kept spending the way we had been, we would be poor, we would never have savings.”

The Diaz’s were over $30,000 in debt, the majority of which stemmed from the purchase of a vacation timeshare that they now admit was a “big mistake.” They began a classic debt reduction strategy, putting all their financial efforts into paying down the highest-interest debt while making minimum payments on lower-interest debts.

Diaz was also given the task of creating a monthly budget. After tracking their spending to see where the money was going, they realized that, “The reason we were struggling was our lifestyle. We liked to go out with friends, go to the movies, play pool. We would spend all the money we wanted,” she said.

Now, she and her husband are learning how to have fun and spend less, by renting movies and cutting back on dinners out. “I’m not going to lie, it’s difficult to stick to it,” she said.“I don’t want to sacrifice my whole life and be the only one at home while everyone else is out. So we compromise.”

The couple has also made major strides toward their top long-term goal, to retire comfortably, by opening and setting up automatic payments into Roth IRAs and 401(k)s.

Diaz’s advice for other savers is to think about savings “not in terms of how much you make, but how much you keep”, adding that “sometimes that means putting off what you could have today, to make sure you have something later on.” 

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