Thursday, April 22, 2010

Don't Wait For Your "Big Break" To Strike It Rich


Saving Money Tip #251 - Don't Wait For Your "Big Break" To Strike It Rich. I know many people who put off savings or do not save enough because they may have low or average income. Instead, they are waiting for that "big promotion" or when they will invent the next "big thing" or start the next greatest business venture or win the lottery or or or.

Instead, they should be putting away a little bit at a time week after week, month after month, year after year. And then one day, maybe 20 to 30 years later, they will be millionaires. While other people who are still waiting for their "big break" in life will have nothing in their bank account. Most will die waiting to become rich. Very few will win the lottery, start the next Microsoft, become the next company president, etc. Most people have the opportunity, however, to skim a bit off their income on a regular basis and put it in to savings.

That's not to say you shouldn't have goals for yourself for job promotions, expanding your business, or starting a profitable venture. You absolutely should. But you shouldn't be waiting until you become very successful in money-making to start saving. Because there's a good chance you won't ever become "very successful" in money making. And then you will have no savings to show for it. Instead, save gradually. When you are earning $25,000 per year, try to put away $2,000. As your earnings grow, put away more. And if you do strike it rich one day 20 years down the road, you can spend some of that money luxuriously. And if you don't, then you will have savings that you worked hard for.

In Real Life (IRL) - I've always written how I am a saver. In the 21 years since I've been out of college, I've managed to put away quite a bit of money, even when I was making as little as $19,5000. And even though I am doing better financially than many people my age, I often don't give myself credit for saving so much because I had a good start in my financial life that others didn't have. My parents paid for my college - the full ride - tuition, books, and room and board. Many people I know have student loans. I got a car for my college graduation. Most people have to buy their own. My parents are generous with financial gifts - such as taking us on a cruise last year. Many friends' parents give them nothing.

But you know what? Many people in similar circumstances as mine still would have nothing to show for it. One of my relatives who got the same start in life that I did, as well as the same types of benefits - college tuition paid for, a car, financial gifts - has managed to spend most of what he has earned. He often talks about what he will do if he wins the lottery or when his next invention will bring his family a windfall or when he gets promoted in his job how he will buy a luxury home. I cringe each time he says those things because the likelihood of any of them happening are not very high. Instead, he could be saving a little along the way and amass a fortune by the end of his life. And it has nothing to do with his start in life. Nearly anyone can do this, no matter how much you earn as long as they are not waiting for that "one day" when they will get a big break and all of their financial problems will be solved. For other ideas on saving money, check out Frugal Fridays.

3 comments:

Lori @ Couponomic Stimulus Package said...

Very true! It's a state of mind. As Dave Ramsey often says, "I've been broke in my life, but never poor. Poor is a state of mind." And people who blow everything they have just think "The Rich get Richer and the Poor get Poorer." Yes this often happens, but because of the habits that are formed, not because of some mathematical formula.

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Jennifer said...

So, so true. At some point you just have to start saving, whether you really have the money or not. A few years ago I just decided that if I didn't go ahead and start contributing to an IRA then I probably never would. I don't miss that $100 a month and in 5 years it has grown quite a bit.