Monday, September 13, 2010

Somebody Save Me!

One of the most important financial decisions you can make on a daily and monthly basis is to save money. But in our society saving is often an afterthought, if that. People become so focused on the demands of today that they forget to save for the demands of the future.

The wisest man who ever lived, Solomon, believed so much in savings that he communicates emphatically in Proverbs 6 to, "Go to the ant, you sluggard! Consider her ways and be wise, Which, having no captain, Overseer or ruler, Provides her supplies in the summer, And gathers her food in the harvest.  How long will you slumber, O sluggard? When will you rise from your sleep? A little sleep, a little slumber, a little folding of the hands to sleep— So shall your poverty come on you like a prowler, And your need like an armed man."

And later on in chapter 30 he says, "There are four things which are little on the earth, But they are exceedingly wise: The ants are a people not strong, Yet they prepare their food in the summer."

Solomon was amazed by the wisdom of the ant who could barely see above a blade of grass, yet had enough foreknowledge to set aside provisions for the winter to come.

But there lies the problem for many of us. We get caught up in our own "blades of grass" that we forget that the winter does come, it always comes.

To be honest, I'm not always thinking about what I need to be saving for that is a year out or five years out. So I need some help. One amazing tool that I have started using is a website called http://www.smartypig.com/.

This website allows you to establish savings goals and then it automatically drafts whatever amount you choose out of your account each month. So if I want to save $1200 for Christmas, I set up a Christmas savings account and then it automatically pulls out $100 on whatever day I choose.

This way I have no choice. It doesn't matter if I forget or if I don't really feel like savings, I have to because SmartyPig makes me. There are several other bonuses like money market-ish interest and the ability to earn cashback on purchases. But I just use it to keep me disciplined with savings.

So no matter what format you use, you need to save. You have to save! Your financial health depends on it.

A few practical points to leave you with:
  1. Save with a Purpose
    • Don't just throw money back because something might happen, have specific savings goals-  i.e. college, car fix-up, house fix-up
  2. Save Consistently
    • Do it every month. Do it every paycheck.
  3. Save Now!
    • Even if it is just fifty cents. Put it in a piggy bank and save all the change you get.
  4. Save Today...so you can say no to your credit card later
    • When you choose to spend instead of save it will always catch up with you
  5. Save Second
    • After you pay your tithes, it's best to pay yourself. Otherwise Ronald McDonald always seems to get to it before the month is over.  
So go ahead and start saving today. Make a choice and put something back.

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