Do You Get Saver’s Fatigue?
About eight months ago, I shared the success story of my client Gretchen who started with $630 in her checking accounts and $2,000 in credit card debt, and after six months of working together she had $6,000 in savings and $700 in credit card debt, and she accomplished this on only $55,000 per year salary. I honestly never thought Gretchen would experience such success, but all she needed was a plan to implement and a roadmap to follow.
Gretchen is not one of my clients that I speak to on an ongoing basis; however, I always check in on her numbers and make sure that she is continuing to work towards her goals. The last few times I have checked in on the numbers, it looked like she was hitting a plateau. Where she made big strides initially, now her results weren’t quite as appealing. She was still moving in the right direction, but not as fast as she did initially. So I texted Gretchen to check in on her and see if she wanted to chat, and she did.
When we got on the phone, the first thing Gretchen confessed was that my text prompted her to reevaluate her spending. Gretchen has a number of automatic mechanisms in place to keep her on track, but she had stopped looking at the fine details. Upon further examination she realized that her student loan debt payments rose $200 per month at the beginning of the year, yet she hadn’t adjusted her lifestyle and budget for this change. In addition, she has a milestone birthday coming up and had spent money planning for that, and while these things certainly contributed to the change in her accounts, she was missing the bigger issue that was happening without her knowing it.
Saver’s Fatigue is Real
Before we began talking, though, I knew Gretchen’s problem, I knew that she had saver’s fatigue. This is an issue that’s not common amongst everyone, but it’s a potential issue for spender’s who adopt a healthier financial lifestyle. Where they may have been successful in making changes and achieving financial success, after a period of time, it’s as though they hit a wall and start regressing.
Gretchen hit her wall around December where she started to allow budget slips here and there like more evenings out rather than eating from home or buying new clothes that she didn’t necessarily need. It started with these minor leaks and ended with the big budget blow up of the birthday trip. As Gretchen shared with me, “I’m tired of feeling like I am poor.”
The good news for Gretchen is that she’s not poor (at least not like she was over a year ago when we began working together). Despite the fact that she has hit a savings wall, between her checking and her savings accounts she has over $9,000 where she had $630 a year ago, on the problem side, though, her credit card balances are higher than they had been. Instead of paying them off every month like she had been doing, they were growing.
Saver’s Fatigue Leads to Poor Planning
When I asked Gretchen how she planned to pay down the balances that she has accumulated, her immediate response was “more peanut butter and jelly sandwiches.” While this is probably one thing she will do, I think it hit Gretchen that she really didn’t have a plan for how to pay down the debt she had accumulated over the last four months, and this was the most concerning issue for me. I understand the issue of saver’s fatigue and the desire to splurge, but when we feel saver’s fatigue come on, we have to splurge with intention rather than splurge mindlessly.
I don’t have an issue with Gretchen’s birthday trip, and I’m excited for her to celebrate it, but I do have an issue that she didn’t fully plan it out other than to know that she could put the trip on her credit card. Because of this mindless spending, we now have to make adjustments in hindsight where it would have been easier to plan in advance.
Rebooting after Saver’s Fatigue
Gretchen and I spoke about a number of the things that she could do to reboot her savings and her financially responsible lifestyle and one of the things she is going to do is focus more on growing her “splurge” account. Gretchen has a checking account, a savings account, and another savings account for travel and splurge items. Unfortunately because of a few weddings, this account was depleted which is why the credit card balances grew.
She now knows that she has to make her fun plans based on the balance in that account rather than the availability on her credit card. In addition, Gretchen is looking into weekend babysitting for some extra fun money. It’s not exactly how she wants to spend her weekends; however, she knows that if she wants to have more fun, she has to find more money.
I’m proud of Gretchen for owning up to her struggles and her commitment to make a change. The great news is that because she has built her wealth this past year, the setback is not as large as it could be. We also caught this fatigue in time before it did even more damage to her finances.
What happened to Gretchen is the equivalent of binge eating after coming off a diet. It’s okay to splurge a little after a diet, but too much binging will just erase all of the good you did when you lost the weight. Fortunately, we caught Gretchen at about 10 pounds overweight versus 50, so while she will have to do some work and make adjustments, it won’t take her too much time to recover.
Gif Source: Giphy