Eunice Diaz, a teacher in Colorado Springs, had been noticing a pattern. Despite the fact that she and her husband were “making good money,” they were spending their entire earnings and “were still struggling at the end of the month.”
So, when Diaz saw an America Saves article about “paying yourself first,” she decided to make some changes in her approach to money management. Diaz went online and, through the America Saves website, found Colorado Saves.
After signing up as a Saver and talking with staff, Diaz got started saving by purchasing a certificate of deposit that carried a penalty for early withdrawals. As someone who had tried to save only to raid the account to pay for non-emergencies, it was exactly the sort of product she needed.
Diaz also entered and won a Colorado Saves contest to receive the services of a financial planner for one year, for free. “I think I put in the best plea for help,” Diaz joked.
Working with a financial planner from Money Management International, a non-profit partner of Colorado Saves, the couple started off by assessing their financial situation. The financial planner helped show the couple that “we didn’t have a game plan,” said Diaz. “If we kept spending the way we had been, we would be poor, we would never have savings.”
The Diaz’s were over $30,000 in debt, the majority of which stemmed from the purchase of a vacation timeshare that they now admit was a “big mistake.” They began a classic debt reduction strategy, putting all their financial efforts into paying down the highest-interest debt while making minimum payments on lower-interest debts, and are well on their way to paying off that first debt.
Diaz was also given the task of creating a monthly budget. After tracking their spending to see where the money was going, they realized that, “The reason we were struggling was our lifestyle. We liked to go out with friends, go to the movies, play pool. We would spend all the money we wanted,” she said.
Now, she and her husband are learning how to have fun and spend less, by renting movies and cutting back on dinners out. “I’m not going to lie, it’s difficult to stick to it,” she said. “I don’t want to sacrifice my whole life and be the only one at home while everyone else is out. So we compromise.”
The couple has also made major strides toward their top long-term goal, to retire comfortably. They’ve opened a Roth IRA and 401(k)s, both of which they add to through automatic deposits. Diaz also saves into an additional retirement savings plan offered through the school district she works for.
Diaz’s advice for other savers is to think about savings “not in terms of how much you make, but how much you keep” for yourself, adding that “sometimes that means putting off what you could have today, to make sure you have something later on.”
Developing a Savings "Game Plan"