How a Savings Account Makes You a Better Negotiator

Photo by Teigan Rodger on Unsplash

When you’re starting or learning how to run a freelance writing, or any creative business, it’s awfully easy to ignore saving some of your hard earned cash. After all, the reasoning often goes, you can do that later, when your income increases. Of course, that’s true but by postponing the savings habit you’re actually making it harder to establish one down the road. Consistent savings is a habit and the sooner you acquire it the better.

Savings will make you a better negotiator

There are all sorts of practical reasons why you want to establish a savings plan and stick to it. The most surprising, however, isn’t obvious and it’s this: If you’ve got even a month or two of income squirreled away where you can get it easily, you’ll find it much easier to stick with your pricing and other terms. The reason is obvious; you’re not desperate for cash so you can negotiate from strength and confidence. In my opinion this alone makes it worth doing at least some serious savings.

How to get started saving money

I have a couple of ways I save money. The first is just a way to trick myself into letting cash mount up, and that’s to save my change. If I go shopping I tend to pay cash and almost always end up with some change. When I get home, I throw that change in a jar. It mounts up and when the jar is filled to overflowing I get those coins turned into a deposit in my savings account.

Yes, having an actual savings account can make it easier to save. The easiest is to have your savings where you do the rest of your banking. Consider, however, opening an online savings account where you can get a bit more interest. Transferring money between accounts quite easy these days, particularly in western countries.

I also save a percentage of every check or payment I get. If you pay me $1,500, I’ll deposit $150 in my savings account. When I first started doing this the savings refused to stick my income was too low to allow saving 10 percent, so I started with, I think it was, four percent and inched up from there.

In the beginning there was always a reason why I had to take the money I’d put in savings out. Gradually in an almost magical way over time more and more of it began to stay right there in the account. I’ve never been sure, but I suspect I started to take pride in having savings and kept at it. And when I realized how much better a negotiator I am when I’m backed up with savings, it made it all the easier. Or perhaps it was simply because I’d become focused on savings and what we focus on tends to persist and increase.

Multiple savings accounts

These days I have more than one savings account. I have what my credit union calls my ‘primary’ savings and I think of as my ‘prudent reserve.’ That’s where I deposit at least 10 percent of all income. I’m soon going to increase that to 11 or 12 percent.

I also have a savings account for my cat’s vet bills, another for the purchase of a new computer when this one gives up, a new smart phone, etc. etc. etc. Most banks and credit unions will let you have multiple savings accounts at no additional fee and I find knowing I’ve got $500 tucked away should Dudley the cat need surgery or something makes for a sense of security and calm. It also means better care for Dudley.

How much savings is enough?

Experts tell us that we should have three to six months income saved and that’s a great goal. I’ve started aiming for the max and my plan is, once I’ve got the six months saved, I’ll use the next $100 to start investing or saving for investment. Meanwhile I’m figuring out how I want to invest and that’s kind of fun. Pick a goal, work toward it and when you get there, decide what’s next.

If you actually have, for example, enough saved to cover all your expenses for even a month or two, the next time someone tries to tell you you’re charging too much you’ll be able to walk away with ease. That security is worth working for.

Write well and save often,

Writer, life and writing coach, book ghostwriter, Grandmother, Buddhist. Liberal who listens to the other side, political

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