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Posted 1/20/2003









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The saving secret that's worth millions
I'm envious of natural-born savers who never feel weak-kneed in front of a Crate & Barrel. But there's hope: I now know the fabulous secret to becoming a real saver.
By M.P. Dunleavey

I've always wanted to be good at saving money. I remember taking my first $20 bill, which I kept in a Band-Aid box, to deposit in my local bank. I was 30.
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Okay, I was 9. But even then I didn't get it. My parents had explained that my money would earn interest, so I thought that money was like a seed. Once it was buried in the bank all I had to do was watch it grow. I couldn't wait to take the money OUT. Putting more money IN seemed beside the point.

And that was pretty much how I saw things for the next 25 years.

Financial psychologists -- a growing segment of the shrink population -- say this is a typical story. You may feel that you were born a saver or a spender. But you weren't. (Sorry.) In fact, like a lot of other dumb patterns, these habits started early in life. And you can change 'em.

I know, it's easier to say you were born to shop and you couldn't save a nickel if someone FedEx'ed it to you with a deposit slip. But four out of five money shrinks surveyed said even the spendiest spender can learn to save. And I'm going to tell you how.

First, blame your parents
In case you hadn't gathered from watching "Oprah" or reading all the touchy-feely self-help finance literature out there, what makes one person a saver and another a spender is deeply rooted in childhood.

Marty Carter, a family communications consultant with Charles D. Haines, LLC., in Birmingham, Ala., tells a story about the son of a friend of hers. Several years ago, the kid showed her his savings project: a wooden board on which he'd glued Tupperware containers. He'd labeled each one according to his various savings goals (comic books, etc.), and one bore the label, Gas. When she asked him why he needed gas money, he said he planned to have his own car when he turned 16, and he needed to save for gas.

It's unclear whether he knew he also had to save for the car or maybe thought the wheels were coming courtesy of the car fairy. Point is: This kid came from an annoyingly functional family. Both parents were accountants -- and they would all sit around and have family meetings and discuss family purchases and how everyone was planning to invest their allowance. The Financial Brady Bunch.

I didn't grow up in the Financial Brady Bunch, and neither did you. So sit down with some graph paper and a large martini and figure out how your parents' attitudes and behaviors around money made you the mess you are today. Hint: Your money habits are either a carbon copy of theirs or a dysfunctional reaction against them. Now throw out the graph paper and drink the martini.

Why a spender spends
Actually, when you talk to financial psychologists and planners about what makes a saver or a spender, they all agree that emotions play an important role, perhaps even greater than habit.

Bob Kenney is the executive director of More Than Money, an organization that was designed to help wealthy people do more with their money than just make more of it (See the link at left under "Related Sites"). He knows from experience that whether you're a saver or a spender has nothing to do with how much money you have. He's seen wealthy people who pinch pennies and equally rich folks who are spendthrifts.

What matters is whether what they have is "enough," and whether they tend to react to that perceived scarcity or surplus by buying or saving.

The same fear of not having enough might inspire one person to save money and another person to spend it lavishly -- regardless of how much money they actually have. Kenney's point is that even rich people sometimes have to be taught to save. More Than Money sponsors community discussion groups for its members, and people often help to rein in each other's spending. "If your peer tells you, 'You don't need three homes,' you're going to listen to them," Kenney says.

I wish someone would tell me I don't need three homes, but Kenney feels that part of the problem with big spenders at all income levels is that changing your behavior "is almost countercultural." "Every place you go you're pushed to buy more," he says. "But how much more do we need? It's easy to forget (about saving), because the dominant culture wants you to believe you don't have enough."

A sense of control and a goal
Not everyone spends out of some underlying emotional need, however. "It could just be a bad habit," says Margo Geller, a wealth counselor with GV Financial Advisors in Atlanta. "It's like eating junk food. If you grew up in a family that ate potato chips and McDonald's, you'll probably do that, too."

Kenney says a lot of people are on automatic pilot. "They're stuck in third gear and can't get out of it. They go shopping without a thought, because it's time to shop, because they pass that store or see the word 'sale.' "

So how do you become a saver? Well, I could give you the bad news about discipline and all that. But I'll tell you the truth. It's not about discipline: Learning to save is about wanting something else more than you want to spend.

It's true that it helps to "pay yourself first" and all that classic personal-finance advice. But you won't do it unless you want something really, really badly. Like the 9-year-old kid and his Tupperware saving strategy. He wanted so much to drive that he was willing to save seven years' worth of gas money.

I never saved a dime (this is sad, but totally true) until I wanted to buy a house. Suddenly I was the saving queen. Now, I have to confess that as a longstanding spender, I'm not comfortable saving. It's unfamiliar. So my desire to save battles with my desire to spend -- on a daily basis. If not hourly. Especially when the Bliss Spa catalogue arrives in the mail. I hate that damned thing.

But increasingly my desire for certain things -- more money for retirement, a new car, furniture for the house -- is gaining the upper hand. And that's how I've learned the little secret about being a saver that no one ever tells you.

Saving is even more fun than spending. (No, I'm not trying to pull the wool over your eyes.)

When you're a spender, you can't believe anything could top the feeling of indulging yourself. But talk to anyone who is a natural saver and they will tell you how fabulous it feels to be in control of your money, to know how much you have and that there's plenty of it -- and you're watching it grow.

My friend Val is not only a natural saver (a habit she learned from her very money-savvy mother), but she dislikes spending. When she and her husband moved, it was stressful for her -- not because of the hassle, but because she had to spend money to do it. Recently, she and her husband took a vacation, for which they had saved (nothing on Visa, OK?). She was glad they were able to pay for their getaway, but what made her happiest was coming home and knowing she was going to start saving again.

I can’t imagine I’d ever dislike spending money. No way. Not while there’s a Crate & Barrel still standing. But I am getting the idea that saving money can bring equal pleasure -- and a really cool feeling of power. That kind of makes me want to keep saving -- at least until I conquer the world and BUY EVERY CRATE & BARREL STORE ON EARTH.

Okay. I’m working on it.