"A part of all you earn is yours to keep." - The Richest Man in Babylon by George Clason (1926)
Blow the dust off your savings account. We are going in!
You better grab a glass of water and settle down. This is a long one.
Do you remember when you were a kid and opened up your very first
savings account? Do you remember how proud you were to add that crisp
$5.00 bill you got for your birthday into that savings account? And
do you remember showing anyone who cared, your little bankbook with
the numbers entered in?
Today, our CHECKING account gets most of the attention. Our paychecks
go in, and the payments go out. It is like a huge wallet. Money that
goes into a checking account is destined to go out. And for some of
us, it goes out pretty fast LOL. How long does it take you to balance
your checking account each month? How many hours do you spend trying
to account for the missing dollar? YIKES!
The time you spend with your checking account is very important. But
so is the time you spend with your savings account. Think about it
.
A CHECKING account is used for your day-to-day living expenses: food,
shelter, clothing, vehicle, utilities, etc. It is also used to pay
for stuff. Stuff to wear, stuff to put in your home, stuff to eat,
stuff to put in your car, stuff to give away, stuff to do, and more
stuff. And lastly, the checking account is used to pay for
historical stuff. This is the stuff you bought last week, last month,
and last year that still shows up on your credit card bills. WHEW!
No wonder the checking account gets so much attention. And no wonder
that last dollar needs to be found!
A SAVINGS account, on the other hand, is a much quieter beast. Like a
faithful dog, it just sits there waiting to be fed. Some families
feed it regularly every month. Some families feed it when a windfall,
bonus, rebate, and/or refund comes in. And for some, there are only
the meager crumbs leftover at the end of the month in the checking
account.
Your savings account is your future.
Do you have a savings account? Do you know what is in your savings
account? Or is your savings account continuously emptied to feed the
checking account? I will be the first person to tell you that saving
money is not easy. And not only is it difficult, but it is boring.
You put the money in, and it just sits there. With today's interest
rates, it doesn't even grow very much. A new pair of shoes begins to
look like a lot more fun! WRONG!
It is about your attitude. When you learn to save, you learn to live.
Your checking account takes care of the present.
Your savings account
takes care of the future. You need to take care of both.
If you already have a plan to feed your savings account on a regular
basis, and it is working for you and your family, then DON'T change a
thing! You are doing great already.
On the other hand, if your savings account is something you are
planning on building later, then "later" just arrived LOL. Today's
the day! No more waiting until the bills are paid. No more waiting
until the kids are done school. No more waiting until you buy a
house. No more waiting until later.
Your savings account is your future.
Here's your challenge: Blow the dust off your savings account. Find
out how much is actually in your savings account. You don't have a
savings account? Then a trip to the bank is in order. Don't be
scared, embarrassed, or shy talking to bankers. Most of them are moms
and dads just like us. They want to answer your questions. Then want
to help you. And it doesn't matter whether you start with $5.00,
$50.00 or $500.00. Just start. And be very proud of your start!
So where is this money going to come from? I have two ideas for you.
One is the most common advice from financial "experts" and I believe
it is the best advice for a family who has never before built and
managed a savings account.
- PAY YOURSELF FIRST: You have heard this before. It is very easy to
set up and very easy to maintain if you are ready for this. Set up
an automatic transfer at the bank that takes 10% from each paycheck
and moves it from the checking account into the savings account. And
you leave it in the savings account. And you let it grow. Now,
some "experts" say 10% isn't enough. I have no idea. I do know, that
if you have never done this before, then 10% is a good place to
start. The neat part is that the money is still accessible in case
you "need" it (and a new shoes don't count LOL).
Now here is the hard part: you have to learn to live on 90% of your
family income. I believe that income is like space in a closet. No
matter how high the income, or how large the closet, we learn to
spend all the income and fill the entire closet. I have seen many
people, barely able to survive at one salary, suddenly get a wage
increase. Before long, they are barely able to survive at the new
salary.
"For every ten coins thou placest within thy purse take out for use
but nine." from the "Richest Man in Babylon" by George Clason
(1926).
- SPEND LESS THAN YOU EARN: I have a confession to make. My husband
and I do NOT save money. Now, having said that, in the end, we
always have much more than 10 percent of our earnings added to our
savings account. I wanted to set up the automatic transfer for our
checking and savings account. But my husband said, "Why? We never
spend more than we earn. Our savings account is already growing."
That was nearly 20 years ago when we were making very little. And he
was right. We do not, and never have, spent more than we make. As our
jobs changed and grew over the years, our spending habits stayed
constant. Of course, the addition of kids changed a few things LOL.
But even with kids and their expenses, our goal was to still spend
less than we earn. And it is possible and doable. In fact, we don't
even think about it, we just do it.
For our family, it was easier to spend less, than it was to save
more.
Regardless of what works best for you and your family (Pay Yourself
First OR Spend Less Than You Earn), two bad little phrases are going
to try and steer you away from your goals.
Advertisers, marketers, and retailers are going to use these phrases
on you. Your kids are going to use these phrases on you. Your friends
are going to use these phrases on you. The salesperson is going to
use these phrases on you. And YOU are going to use these phrases
(excuses) on you.
- A person has to live too.
- You deserve it.
Last weekend, I was at a home renovation show with a girlfriend of
mine. I felt like I was at a giant salesmen's convention. According
to three of the salesmen, I "deserved" a new mop (that could almost
wash the floors by itself), a new knife (that could almost cook
supper by itself), and a new synthetic duster (that could almost dust
the house by itself). As my dad says, "Almost only counts in the game
of horseshoes." I let the salesmen keep their products.
Listen for the two bad phrases and when you hear them, STOP. Remember
the three rules of NOT buying:
- DO instead of BUY: discover all the wonderful things you and
your family can do to live life without spending a dime.
- SHOP at home FIRST: you probably already have one at home.
It's paid for. You may as well use it.
- PROCRASTINATE: take the time to think about what you are
planning on BUYing. Chances are, you won't need it, or want it.
Take care of you!
Cindy
PS: You'll note I didn't say anything about what to do with your
savings. I didn't talk about paying off credit cards, or investing,
or renovating, or paying off mortgages. That was on purpose. Right
now, all we are doing is concentrating on SAVING. Once you have begun
saving, the future is yours to decide what you want to do with it.
