In 2022, I spent money like I had copious amounts of it. I furnished my newly rented apartment with more than just the basics. I got my nails done every few weeks. I hosted parties. I ordered in. I ate out… the list goes on. I indulged in 2022, and if I’m being honest, I don’t regret much of it.
However, there is one thing I feel disappointed about. I had set out to save money last year and as you might have guessed, I didn’t do much of that.
If you had the same kind of year in 2022 but now are ready to take control of your finances in 2023, then this article is for you.
Today, Reni Odetoyinbo, also known as ‘Reni the Resource‘, a financial literacy, career development, and lifestyle Youtuber chats with us about habits people overlook that can lead to unmet savings goals, and of course, she also shares her best tips for overcoming them so you can hit your financial targets in 2023.
Meet Reni
Reni’s journey in financial literacy began at a young age, thanks to her father who was determined to educate her and her sister on the subject as early as possible.
Reni explains that her dad’s journey with personal finance started when he moved to England at the age of 18 or 19 from Nigeria. In England, he came across a publication called The Motley Fool, which focuses on how to make money grow. Fascinated by the idea, he learned more and more about personal finance and decided that when he had children, he would teach them about money early in their life so they had a head start.
In university, Reni began doing her own research on personal finance, consuming content by financial bloggers like Bola Sokunbi who founded Clever Girl Finance, and Tiffany Aliche founder of The Budgetnista.
“They were big inspirations in my finance journey. I liked their stories because they weren’t born into extremely wealthy families, they were just the average person building wealth. They’re also black women and that was very inspirational to me because I could see myself in them.”
After a stint working in banking where she was responsible for writing content to teach rich people how to get wealthier, Reni thought about the impact she could have on her community if she helped make the same information more accessible. She began her Youtube channel sharing financial knowledge including how she was able to buy a home at the age of 23 so others with similar goals could follow in her footsteps.
Below are Reni’s tips to help you with your savings!
1) Get into the habit of paying yourself first
One habit Reni sees people doing wrong when it comes to saving is not paying themselves first.
“Say, you want to save $200 every month. When you get your paycheck, automatically $200 should be going from your checking account to your savings account. A lot of people do it the opposite way around. They leave saving as the very last thing instead of doing it first so, at the end of the month, whatever is left over, that’s what they save.”
If you can switch your habit to put away your monthly goal amount as soon as your paycheck hits Reni says, you’d be surprised how much you’d save.
“You won’t be tempted to spend it because it’s already gone from your account!”
2) Have separate savings accounts for your goals
Reni also recommends having separate savings accounts for your different financial goals. For example, if you want to buy a house, a car, or a new phone, they should all have their own account.
“The problem with [having one account for all your savings goals] is that when you take money out of that account for something, you don’t know which goal you’re taking it out of. That can be discouraging or just confusing when you are trying to reach your savings goal because you never know what goal you just hijacked!”
3) Get specific about your goal
Do you know how much you want to save and by when? Do you have a sustainable plan to reach that goal? If you don’t, it’s likely holding you back!
“Saying I want to save a lot of money this year is not a good saving goal,” Reni says.
To truly meet your mark, she wants you to get more detailed.
“You need to have a very specific plan to get to your savings goal. So, you can say, I want to save $5,000 this year, and to do that, I’m going to put away x amount of dollars every two weeks in x account. This money is for this goal.”
Reni has some awesome free saving plans online that can visually help you plan what you’d need to save bi-weekly or monthly to reach your goals.
“Last year, someone saved $100,000 using this plan. So, it definitely works!”
4) Build an emergency fund
Reni believes not having an emergency fund is another bad habit that can easily interfere with your savings goals. She describes an emergency fund as an account that you keep liquid cash to use specifically for emergencies.
“Emergencies are bound to pop up. If you never have an emergency fund, then you will always have to take from your savings goals to cover those emergencies. So, my suggestion would be, to build up your emergency fund so that when emergencies come up, you can take from that fund instead of going into debt or taking from your other goals.”
She recommends saving at least three months of your essential expenses in this account.
5) Track your money
It’s easy to live beyond your means when you don’t know what’s coming in and going out.
“If you make $5,000 a month, but you’re spending $5,500 a month, you can never save that way. A lot of people don’t even know they’re doing this, because they don’t track any of their expenses,” Reni says.
She suggests that everyone starts a budget.
She believes, with a budget, you’ll really see why you’re missing your savings goals and how you can get back on track. For example, you might notice an area where you don’t need to be spending so much and thus be able to reclaim some of it for savings.
Reni uses Excel to track her budget, but there are lots of tools you can use outside of Excel too.
She highlights Google Sheets, Mint, and Every Dollar as alternatives to Excel.
6) Sleep on it
If you’re a chronic spender, try this hack. Practice delayed gratification. Just because you want something right now does not mean you have to have it right now.
Reni says this is a hack she uses on herself. When she wants something she doesn’t need, she tries to shift her mindset to remember her future goals.
When you feel an impulse buy coming on, Reni says try asking yourself: ‘Does this thing bring me closer to my goals? Or does it draw me further away from my goals?’
“That’s how I typically think about purchases. I like to sleep on my purchases as well. So, maybe 24 hours. Do I still want it in the morning? Oftentimes, I don’t. So, then I am saving that money.”
7) If you can’t cut – make more
While curbing your spending is one way to save, Reni says there’s another option for people who don’t want to cut back:
“I think it’s easier to increase your income than it is to just lower your expenses. So, if you are somebody who thinks, okay, I need all of these things (I am the same way. I like to get my nails done every month. I like to get my hair done) the easiest alternative to lowering expenses would be to increase your income. So start investing in yourself, upskill [to make more money] or get a side hustle to help you cover these expenses.”
8) Find an accountability partner
While people have been saving using Reni’s plans, she says one thing she noticed was people would derail in the summer.
“People were telling me they used the savings plan successfully up to summer. Then, summer would happen, and all their money was gone because they were outside.”
To tackle this problem, in 2022, Reni launched an accountability group for the first time. It was essentially a group where she let in 100 people and every two weeks, or however often they got paid, they would send a screenshot showing they transferred X amount of dollars into a savings account.
“Last year, we save over $935,000 together. Just accountability, the fact that they had somebody reporting and checking in on them regularly, allowed them to reach their goal. People used it for all different kinds of reasons. Some people put down payments on a house, some people went on vacation for the first time, and some people used it to build up an emergency fund.”
While Reni’s 2023 accountability group is currently full, she says it doesn’t have to be her holding you accountable. She recommends partnering up with anyone who has similar savings goals and holding each other accountable to putting away the goal amount every month.
Final words
When I ask Reni if she has any final words she says, not to be afraid to ask for help.
“You do not have to do this alone. There are so many people out there. So many finance content creators who have programs that can help you. So, ask for help.”
For more tips from Reni, you can follow her on social media at the links below or you can listen to her podcast called, Don’t Go Broke Trying where she shares resources and stories that teach you how to not go broke trying to live your best life.
LinkedIn: https://www.linkedin.com/in/reniodetoyinbo/
Youtube: https://www.youtube.com/c/xoReni/videos
Instagram: https://www.instagram.com/xoreni/
Website: https://renitheresource.com/
