Savings: Reactive vs. Proactive

“The past can hurt, but the way I see it, you can either run from it, or you can learn from it.”

– Rafiki, The Lion King
Photo by Kat Yukawa on Unsplash

The Simple Truth

Us young adults have heard it before…

“You should have 3-6 months’ worth of expenses in your savings.”

“Set up an automatic deposit into your savings accounts.”

“You should have more than 1 type of savings account.”

Why is it that when adults recommend things, some of us let it go in one ear and out the other? I will not speak for the majority, but I know some young adults make excessive excuses about why saving is impossible. I believe if we take a deeper look into our spending habits and expenses, it will show the only thing stopping young adults from saving is themselves.

Proactive vs. Reactive

Current situations; the pandemic of COVID-19, has made it abundantly clear why proper savings accounts are extremely important! If we didn’t listen before to the advice of our elders, we are listening now! During this time, us young adults are getting a front row seat to two different types of savers:

The Proactive Saver

These individuals are aware and worried about their family, friends, and livelihood of others during this time. They are taking the precautions necessary to stay safe and healthy. Some may or may not have lost their jobs because of the situation.

Difference: The proactive savers are NOT concerned with how their monthly expenses are going to be paid. They have stuck to a savings regime and are prepared. These individuals will likely continue their regime or increase their savings after the pandemic has ended.

The Reactive Saver

Same as the proactive saver; these individuals are aware and worried about their family, friends, and livelihood of others during this time. They are taking the precautions necessary to stay safe and healthy. Some may or may not have lost their jobs because of the situation.

Difference: The reactive saver is regretting their savings habit. They are realizing the importance of having an emergency fund and considering the ways they could have been proactive. Current situations have added additional stress and anxiety to their plate.

Lessons Learned: 5 Next Steps

It is too late to dwell on the past. All we can do is consider our current situation and come up with both temporary and long-term solutions:

  1. Continue to make sure you are doing anything and everything you need to stay safe, healthy, fed, and sheltered during this unfortunate time!
  2. Take this time to create or recreate a budget; if you haven’t already, check out my previous post on “Budgeting: The Basics”.
  3. Truly reflect on your spending and expenses – No savings regime is too small ($20 twice a month = $520 in a year!)
  4. Consider why your saving, where to keep your savings, and how you would spend it in the future. Sage Evans provides a nice short blog post on these topics in “How Important Is It to Have a Rainy-Day Fund?
  5. Plan to reevaluate your savings contribution 2-4 times during the year; maybe your situation has changed and allows for more contribution or maybe you need to cut back a little.

My Personal Touch

I am always willing to share my personal savings tactics and learn new tactics from others ; so, if you have any questions or info to share, leave a comment below or shoot me an email!

Until next time, be safe & proactive!

2 thoughts on “Savings: Reactive vs. Proactive

  1. Pingback: Stimulus Check: How We (Young Adults) Should Spend It – Adulthood: Still Figuring It Out

  2. Pingback: The WHY Behind Saving Money! – Adulthood: Still Figuring It Out

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