People often say, “A penny saved, a penny earned,” but at five years of age that just did not ring true to me. My father would try to reason with me if I saved my money, it would grow, and someday it would be worth a whole lot more to me than whatever I wanted to buy right then. Despite my father’s best efforts, as a five-year-old, if I did not have the money then, it just felt like “a penny saved, a penny lost.” This, unfortunately, is how many people, even as adults, feel about saving money.
You may think that I would have “heard” what my father said but not “listened”… that is certainly what I wanted to do, but my father was in the class of force teaching. He would generously give me $0.50 each week as allowance, and then force me to allocate 30% of that $0.50 so that at the end of the week I had $0.05 towards college, $0.05 in my retirement account, and $0.05 went to God. That left me with a whole $0.35 to spend however I wanted, but, of course, that money was encouraged to be saved also, even if it was only for a larger toy or gift.
Looking back, was the pain in the moment of losing my “hard-earned” money worth it? Yes! Not only did it teach me valuable lessons about money and savings, but I actually have money instead of debt. This could be you! There is NO reason for people to be in debt; it is just that no one ever taught those in debt how to effectively manage money.
The secret to money management is very simple! Anyone, even a five-year-old, can do it. So why don’t people save money, stay out of debt, and in general manage their money? Simply, because it takes discipline, sacrifice, and patience.
The first step in money management was clearly outlined in the story about my childhood, but so many people HATE the reality of the first step that they did not even notice it in the story. Here it is plain and simple: SAVE FIRST AND SPEND SECOND. The second step is just as simple: DON’T SPEND MORE THAN WHAT IS AVAILABLE. The third and final step is not any trickier than the first or second: SPEND LESS THAN WHAT IS AVAILABLE. All of this is very simple, right? Of course! It is simple and obvious. Hard yet very simple! Sometimes what is not as simple is figuring out what is the safest, smartest way to save.
Jessi Canales
Focus Financial Group, LLC