More money doesn't mean less saving
Image courtesy of equifax.com
SEATTLE -- As the economy starts to recover consumers find themselves with a little more money in their pocket.
But whether it's buying that latte every day or a new pair of shoes, financial experts warn to not let new found feel-good consumer sentiment be a recipe for savings disaster.
Janice Phillips, senior vice president at Columbia Bank says saving money is about maintaining your financial discipline.
"We've gone through some scary times the last few years, so we need to be consistent with our savings and realize those times might come again. We need to be prepared."
Phillips offers one simple method to help consumers save better when flush with cash.
"I learned this trick a long time ago. Take the amount of money you're considering spending and convert it into the amount of work you had to do to make that money.
For example: If you make $20 an hour at your job and you want to buy a $5 latte, it took you 15 minutes of work to fund that latte. And, when you think about it in these terms it gives you a whole different perspective."
Phillips suggests consumers use automatic savings programs offered through banks in order to save the money needed in case of a rainy day. "That way you never see it, so you avoid the urge to spend it, but you have it when you need it most."