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Maybe $1000 isn’t the magic number for you.  It was for me for years and years.  My goal was to have a savings account with enough money in it to equal my annual income.  Of course, $1000 was not my annual income but it was a real savings hurdle.

You may not know what your magic number is.  Everyone seems to have a different number.  Whatever your number, let me tell you a little story about the trials and tribulations of getting started with savings accounts.

Some years ago I realized the need to save.  My father had drilled the idea of savings into my head.  I was working everyday.  I was paid each week.  And, if I say so myself I was paid handsomely for the work I did.  But, I never had any money in a savings.  As much as I wanted to secure myself with back-up liquidity in case of hard times, I was never seemed to save a penny.  This was the time before everyone in the world had a credit card.  We lived on our income.

I was teaching people to save 10% of their income each pay period, something I still advocate.  However, I realize that in today’s economy and with our personal lack of fiscal discipline it isn’t as easy as it sounds.  I decided that I needed to have at least $1000 in savings… as a starter.  Please understand that forty years ago a thousand dollars was a respectable sum. 

I opened a savings account with $100.  Before the end of the month I had withdrawn $25 from the account.  I had an unexpected car repair and needed $25 more than my paycheck would allow.  Not to worry!  I had $100 in savings.  So, I went to the bank and withdrew $25.00.  That left $75.00 in the account that was aiming for the $1000 mark.

To make a year long story shorter, I went from $75 to $350 without further incident.  Feeling rather good about myself and my growing savings account, I decided to “borrow” $50 from myself and the savings account to purchase a dress to wear to a holiday party.  I wanted to make a good impression on my new friends.  I had taken a job in a new city and had to have something new to wear, as if those people I had known less than a month had already viewed my entire wardrobe.  I never wore a “party dress” to work so no one had any idea what I had in my closet for the holidays.  But, I still felt the need for something brand new.  Hence, I borrowed the $50 from myself.

Okay, so I was down to $300 in my savings account.  The holidays were upon me and everyone needed a gift, probably a gift that cost more than I could afford so I borrowed another $100 from myself… $200 in the savings account.

During the first three months of the new year I was very disciplined and was able to add $300 to the account bringing my total savings up to $500.  The company I worked for decided to send me to a weekend seminar, all expenses paid!  My transportation and hotel were paid in advance, but I had to purchase my meals and submit an expense report.  I withdrew $100 from my savings account to cover my meals and other incidentals.  $400 left in the savings account.

I deposited my expense reimbursement check into the savings account.  But, I had only spent roughly $65 in reimbursible expenses.  $465 in my savings account.  (Who knows what happened to the other $35 I had withdrawn!)

For the next two months everything went well.  I increased my savings to $665.  That was when my account was hit really hard.  Some friends were going away for a weekend and I just had to go.  I withdrew $300 from the account to cover my expenses.  $335 left in the account.  I swore to myself that I would put a little extra in the account each week, cutting back on something.

I never cut back on my weekly expenses and for the remainder of the year, my savings account went up and down and up and down.  Each time I would get close to the goal amount of $1000, I would start feeling “rich” and withdraw a few dollars for something I wanted but didn’t need.  Finally, I became so frustrated that I lost sight of my goal. 

I was miserable.  Yes, I was miserable and feeling like a failure.  I could not even save $1000 from my nice income, or so it seemed.  I decided to buckle down and get the savings account up to the $1000 even if I missed a night or two out with friends or didn’t take the weekend trip to the beach.

The $980 mark was the killer.  Just $20 short of the goal, I decided to trade my old car in for a new one.  I needed $500 over the trade-in value of my car for a down payment.  Talk about a mental crisis!  I was only $20 short of my goal but taking $500 from my savings account would knock me down below the half-way mark again. 

For once in my life, perhaps the first time in my life, I made the decision to wait on buying a new car.  Instead, I invested in a few repairs that only dented my savings account by $100.  The next pay period I took a giant step.  I put $120 into savings.  I hit the goal of $1000.

That was years and years ago and I’m certain your magic number may not be the one I had to hit.  But, whatever your number, go for it.  It is as much a feeling of success as it is a number.  However, once you hit the magic number it will change your life… really.

Once I hit the threshhold I never looked back and never fell below the $1000.  In fact, I began to save more and more.  It was no longer a feeling of “needing to save.”  Saving became a habit.  I learned to pay myself first.  In fact, when I wrote out the checks for the bills each month I wrote a check out to myself first.

Whatever your magic number, set a goal to reach it.  I have provided steps on goal setting in earlier posts.  If you are developing a new habit it will not be easy.  There is no need for the to tell you that starting a savings plan will be easy.  It isn’t.  Period.  But, if you are determined, have that burning desire to get your financial life under control, you will find a way.

Do not become discouraged by the ups and downs.  There will always be something that is nipping at your plans.  Don’t lose sight of your goal.  And, once you hit your magic number you will know it.  Everything will change for you.  You will feel good about yourself.  You will develop a confidence that is unshakable.

If your savings cupboard is bare, set a short term goal of saving one month’s income.  Don’t try to save the entire year at once.  Break it down month by month.  Set short term and intermediate term goals that will lead you to your long term goal.  Little successes put together create a big success.

And, by all means remember that the only way to eat an elephant is one bite at a time.