Tuesday, October 21, 2008

Put Money Away


#16 Saving Money Tip - Put Money Away. You can save money in every aspect of spending that you do and still not have any money to show for it. Even if you get the best deal on food, you might spend that savings on clothes. If you go on the the cheapest vacation possible, you might still spend the "leftovers" on eating out. The only way to actually save money is to, well, actually save it. If you have extra money that burns a hole in your pocket, then you will never save any money no matter how good of deals you get on what you buy. Therefore, you need to have a place for all of these savings - a piggy bank is a good place to start. A bank account that pays interest (with no minimum amount or other restrictions) is even better.

Watching your savings grow can be exciting - even more exciting than buying things with your money. Some people like to put all of their change at the end of the day into a jar and take it out and put in the bank once every 6 months or so. That's one thing you can do to start saving some money. Or you can take 10 dollars each week or whatever you can spare and put it away. Or if you usually spend $100 per week on groceries and you find yourself spending only $80 because you are buying less convenience food, then you can put that extra money in the bank. It's the only way to start accumulating money. If you always spend everything you make, then you will not have any money to show for your work - only things. And most things go down in value after you buy them. So if you want to save money, you need to spend less on things, but you also need to "save" what you save.

In Real Life (IRL) - I am a saver - always have been, and probably always will be. When I was as young as five years old, I was saving the allowances my dad gave me. I kept the money in a little section of my drawer. I had a friend whose mom worked in a bank and had opened a bank account for her daughter. I begged my dad to open a bank account for me. I still remember my passbook (Anyone else remember those?) My first deposit was $70. That was a lot of allowances and birthday gifts, I'm sure! Every few months I would ask my dad to take me to the bank and I'd put in more money. I remember watching it grow to over one hundred dollars and much later to over $500. The best part was the interest, which I'm pretty sure was about 5% back then. Wow, I thought, they give me money just by letting me have my money sit in their bank instead of in my drawer. It was fun watching my money grow.

Since then I have always saved money. When I got my first low-paying job, I still put money away every month in a bank account - and later into CDs, bonds, and mutual funds. I remember just thinking about what amount that I wanted to save each month from my paycheck - it may have been $200 if I remember correctly - and that's what I put away. Over time, the savings accumulated and grew (from interest) and I had a lot of money to show for it. With the money I saved, I was then able to buy things later on such as a house. Because I saved, I was able to take off work when I had my children. And because I saved, I was able to have an emergency fund for things that cropped up that I wasn't expecting, like a new transmission on a car or a crown at the dentist. So, no matter where you are in your life, if you want to save money, you need to put money away. There's no other way to save

No comments: