What I learned about myself during the All #Summer16 (savings) Challenge

May 18, 2016 § Leave a comment

 

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I joined the All #Summer16 challenge that began last week and ends the last week of August. When you sign up, you commit to saving $250, $500 or $1,000 over a course of 16 weeks. The challenge gets its name from Drake’s All Summer 16 single. I plan to have an interview with the founder of the challenge and website The Black Market Exchange, Dr. Patrick.

This post is about what I have learned about myself since starting the challenge.


 

On the Black Market Exchange podcast, Dr. Patrick mentions something called the “Mickey D effect.” The Mickey D effect is when you jot down what you spend on frivolous things like fast food, candy, and otherwise, and use that total to invest in other things. The $2 every morning for the sausage and biscuit can be used to invest in McDonald’s stock. That podcast is over a year old and this week, in conjunction with the savings challenge, I decided to record my daily spending.

It is true that the first obstacle to developing a savings habit is the creation of a budget or the tracking of your spending. A lot of people, including myself, don’t really want to know what they spend on eating out during the week. A few happy hours don’t hurt that much, right? Just like a lot of people don’t want to check to their bank statement until Tuesday morning. If you are one those people, understand it is normal – but do you want to be normal?

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Bloomberg.com

 

 

Normally, people are broke. Normally, people complain about bills. If you are African American and reading this, that normally is more often than not. I learned that 56% of Americans have less than $1,000 in their savings. Their checking, I bet, is predictable yet  fluid, and goes up and down according to the time of the month when their car note is due and the two times a month they are paid, maintaining that perfect balance of $36.50 throughout.

The reason I chose the $1,000 challenge is because I like a challenge. Choosing $250 or $500 are cop outs for me personally. My income allows me to be able to save roughly $56 per week for 16 weeks (I had $104 saved already) without too much discomfort. I have never saved $1,000 and my future goals require me to have a good savings and credit score. For me, saving is less about the dollar amount and more about developing a discipline.

Aside from material goals, saving $1,000 develops a discipline that can be emulated in other areas of life, such as stopping a certain bad habit, developing a study habit for the LSAT or CCNA or work up the energy to finally commit to that summer body (it is May already and San Juan won’t wait!). Once saving a dollar amount or percentage of your income becomes a habit, that amount becomes almost invisible.

Everyone has their own reasons for saving. For you, it could be as simple as STARTING. Just making the decision (and executing) to save is all that it takes. For example, a 10% savings plan may be too much for you. Do like me and begin at 7.5%. After a few weeks of this and moving a few things in my budget around (decreasing the data on my phone plan), I increased it to 10% and now the 10% is barely noticeable!

Next week when I sit down with Dr. Patrick, we will explore why saving money means more than saving money, mobile applications that assist with and pay you for savings, future savings challenges and what Hip Hop teaches us about spending.

The decision for black people is clear: either be consumers and parasites or be savers and producers. I recommend the BMEX for those who choose the latter.

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