We often play a “game” with people who visit our LSS Financial Counseling table. People are given 10 marbles and each represents $100; then we ask what each individual would do with an extra $1,000. They have to decide between 3 jars: ‘Save’, ‘Spend’, and ‘Pay down debt’ and the marbles can be split up in any way. I’ve personally staffed 2 tables in the last month. The first time around, most said they would pay down debt, then save, then spend. At the second event, the majority of people said savings comes first, followed by paying down debt and spending in a tie for second place.
Time of year/situational
Both events had similar people attending as they all worked for a nonprofit of some type. So I was trying to determine why there was a difference by talking to people who played my marble “game”. The main reason seemed to be timing or what was currently going on in that person’s life. There were people who said, “If you asked me in January (or another time of year), my answer would be different.”
A few people’s reasons for this was due to home improvement or other required projects…which actually includes me. We’re putting in new flooring in our main living space soon; therefore, right now I would have put the majority of my marbles toward spending for my new floor. For other people who put more in spending, it may have been partially because of the upcoming Christmas holiday. We’re in the heart of the spending season, so it makes sense.
Different stages of life
The other factor that played a huge role was where people were in life. Some had already paid off their mortgage or student loans, while others hadn’t been out of college that long. Those closer to retirement need to make savings a priority because that will be their livelihood. On the other hand, men and women in their twenties and thirties need to do both saving AND paying off debt for future financial stability.
With the marble game there is no right or wrong answer. The whole point of it is to really make you think hard about where you should focus or possibly re-focus putting your hard-earned money.
And if you’re lucky enough to get a cash windfall, such as a bonus or tax refund, it’s really important to use it wisely.
For more tips, check out Are you prepared for a financial emergency? and 5 smart ways to spend your tax refund. While the second title indicates a tax refund in the title, it can apply to getting an extra $1,000 or other amount from working overtime, selling unused items, or a bonus.
If you carry balances on your credit cards and that’s holding you back from saving for emergencies, retirement, or just enjoying life, LSS can help. We offer free, nonprofit financial counseling to help you achieve your financial goals. Give us a call at 888.577.2227 for your phone or in-person session, or GET STARTED ONLINE at your convenience.
Author Elaina Johannessen is a Program Director with LSS Financial Counseling.