“I’m not earning enough to save!” “Saving is easier said than done.” Sound familiar? Well, per Bahiyah Shabazz, Founder of Shabazz Management Group, LLC, Fabulous & Money Savvy and BROWN GIRLS DO INVE$T, there are many misconceptions surrounding saving. Recently, BlackDoctor.org had the opportunity to chat with the financial expert and author, whose background includes finances and psychology. Shabazz provides helpful tips for those saving it for a rainy day no matter where they are in the savings game.
“Let me begin by saying for people who feel they do not earn enough to save, everyone earns enough to save,” said Shabazz. “It does not matter how much you earn. It matters how much you can put away.” She continued, “Saving is more psychological than physical.”
“If you tell yourself you’re not going to save, of course you are going to believe that you cannot save,” Shabazz said of having a negative mindset around budgeting and saving.
Meanwhile, Shabazz said you can achieve getting over this misconception by adding saving into your monthly plan, better known as creating a budget. You have to see exactly where your money is going, explained the money maven.
“If you allow your money to run all over the place, it will disrespect you and you will not have a great relationship again.”
So, where do you start?
First, Shabazz suggests writing down all of your expenses. According to Shabazz, people take for granted what that means. “When you write down all your expenses, I mean everything,” Shabazz said. In her words, “If you are going to the gas station and you are mesmerized by the nickel candy at the checkout line, you pick that up – you must write down everything that comes out of your household.” Yes, ladies, that also includes girlfriend time.
“If you’re just going to go out for drinks, you literally should write that down as well,” Shabazz added. Once you have written everything down and are keeping track of everything that is coming out of your household, Shabazz stated you may be surprised to see where that money is going and how much you could actually put away in savings.
While tracking expenses is a good starting point, even more important is creating a budget and sticking to it. “A budget is crucial,” said Shabazz, “because it helps you be consistent with your savings plan.” The same way you write down your goals and keep track of them every day, week or monthly, you should apply that same mentality to your budget if you want to be a successful saver.
“Either you use it or you lose it – that budget will hold you accountable for every penny.”
Of course, if you’re always on the go, there’s a variety of tools at your disposal, conducive to both the iPhone and Android. If you’re unable to keep track of your expenses in a simple Excel spreadsheet, Shabazz highly recommends the free Mint app. Mint allows you to track your expenses to the dollar and connects directly to your checking account, especially helpful for folks who don’t hold onto their receipts.
As for how much to save, while the rule of thumb (in the past) has been to aim for about 3 to 6 months – in the event of job loss, as finding employment often takes a year or longer for many – Shabazz advises saving one year of living expenses including rent, car note, insurance, you name it. She cautions, “Now you’re not going to be able to save one year’s worth of living expenses in one year. But if you jot down a plan and come up with 36 months, then stick to it.”
Once you get to a place where you can save, Shabazz’s most important advice is to keep saving. Don’t just get ahead, stay ahead.
Great food for thought. For more information on Shabazz’s services and her company, BROWN GIRLS DO INVE$T, check her out at BrownGirlsDoInvest.com or on Instagram: @GirlsDoInvest.
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