I Grew Up Poor: Here Are 4 Incremental Goals I Set To Build My Savings
Written by
Jamela Adam
Edited by
Amber Barkley
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Growing up without much in the bank shapes the way you see and interact with money. Personally, I was constantly stressed about how the bills would get paid and how I’d afford to pay for college tuition. But instead of wallowing in self-pity, I used these feelings and experiences to fuel my desire to break the cycle.
Here’s how I set incremental goals to help me grow a financial cushion that has allowed me to live a pretty comfortable lifestyle in my late 20s.
1. Set Realistic Savings Targets
The first thing I learned was that you should always make your savings goals specific, realistic and measurable to make it easier to track progress. Don’t just say to yourself, “I need to save more,” without setting a clear target. If you don’t have a clear target, it’s much less likely that you’ll stay on track and actually achieve your savings goal.
So, the first step is to write down exactly how much you want to put away and by which date.
My first target was saving just $500 for an emergency fund. It wasn’t a big number, but it was achievable. Once I hit that milestone, I upped my goal to $1,000 and then $5,000.
If these numbers feel overwhelming to you, break them down into smaller targets of $100 or $300 so that each small win motivates you to keep going.
2. Save Any Windfalls or Bonuses
Instead of splurging my tax refund or work bonus on a one-week vacation to the Bahamas or on a Beyoncé concert, I’d make the conscious decision to save up that chunk of change and put it toward my savings. Though it wasn’t technically part of my budget, and I could spend that money if I wanted to, I didn’t. And that’s because I was committed to building my savings.
Any unexpected money that came my way was an opportunity to get ahead. No matter how tempting it was to splurge, I’d try to save at least 80% of any windfalls or bonuses. For example, if I got $1,000 back from my tax return, around $800 would go straight to my savings account. I allowed myself to spend the other $200 guilt-free.
3. Balance Short-Term and Long-Term Goals
Everyone says it’s important to save for the future and to take advantage of compound interest, but it can be quite hard to stay motivated when the payoff is years away. That’s why I set both short-term and long-term financial goals. Short-term goals give me quick wins, and long-term goals keep me focused on the bigger picture.
Here’s how that works: I set up multiple savings buckets and use each one for a specific purpose, like bills or entertainment. Since I love to travel, I have one that’s dedicated to trips that I’m planning to go on within the next year. But, to make sure I’m saving for the future while having fun, I also have buckets dedicated to retirement account contributions and a down payment on a home.
4. Automate Savings
Automating savings is the number one piece of advice I give my friends and family. When I first started saving, I relied on willpower alone, and I soon figured out it wasn’t a good idea, since I’d always find an excuse to skip it. “I’ll save extra next month,” I’d say. Spoiler: “Next month” never came.
When I decided to automate my savings, that’s when I really started seeing the numbers go up in my bank account. It helped me stay consistent and took the guesswork out of whether and how much to save.
So, if you haven’t already, set up automatic transfers from your checking account to your savings account. Even if you just transfer $100 biweekly or monthly, it adds up. You can also make automated contributions to your retirement accounts.
Financial Progress Is Possible for Anyone
If you grew up poor, it could warp your perception of money and make you think that you’re not worthy or capable of financial success. But to achieve financial progress, you must first believe that it’s possible for you and be willing to take the first step.
Financial literacy is a skill anyone can develop, and building savings from nothing is absolutely possible with discipline and a plan. Remember, you have the power to rebuild the financial security you didn’t have as a child and create a foundation of stability for future generations.
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