Sep 13th, 2012 by Jennifer Lynn
Saving is the cornerstone to building a strong and abundant financial future.
It’s past midnight. The apartment is blessedly silent and I’m curled up on the couch with my tablet, pondering this thought:
I am truly amazed at how little people save.
Many of my friends subsist paycheck-to-paycheck, and they believe stashing away a few bucks here or there is not going to make a significant difference in their finances overall.
I strongly disagree.
Every great financial empire was built upon saving, or someone prudently setting aside what is left over after payments and spending—their surplus.
Surplus of money can only be created in two ways: by increasing cash flow into your personal coffers and by decreasing the cash flow out.
Each cent is an opportunity for growth; fortunes are generated through tucking away teensy amounts of money until it blossoms into a thriving honey-pot of wealth. This small stash of surplus (savings) needs to be guarded prudently—as each cent accumulates, it becomes a financial seed to prosperity.
Plant each financial seedling protectively into fertile soil through wise investments and, through careful cultivation and attention, your seeds will begin to flourish and mature into fruit-bearing trees.
This produces further seedlings—interest, dividends, or capital gains, for example—and these children of initial capital will continue to multiply into streams of income, eventually producing their own offspring, and so on. With enough dedication and perseverance and by proceeding to sow seeds wisely, your small garden of savings will evolve into a thriving orchard of ‘money trees’, each producing an abundance of fruit to sustain you through the seasons.
So, don’t hack down your money tree!
It is so typical nowadays to spend an entire paycheck, which is equivalent to devouring all the financial seeds before they have an opportunity to grow and multiply.
Continuous spending also evolves into a vicious cycle where a financial surplus is never available, and therefore an opportunity to build a solid financial foundation upon it can’t manifest. Without proper attention and care, your financial garden merely withers and dies.
There are also those who foolishly blow through their entire savings and destroy income streams (usually on stuff) and essentially chop down all their money trees, viciously desecrating the entire orchard and leaving their land barren. They then wonder, why is money not plentiful? Why am I destitute and dead-broke?
This is why I am genuinely baffled by how more people don’t recognize the impressive nature and powerful potential of saving. Here is advice I offer to my friends:
- Be mindful that borrowing money—getting into debt—is merely paying rent on someone else’s savings. Avoid this situation whenever possible.
- And most importantly, don’t overlook the importance and value of saving—it is the key to building a thriving financial empire. Each cent wisely used holds the promise of a prosperous financial future.
Small, accumulated savings matter tremendously because it is your path to wealth and opportunity. So, what will you build?
=^..^=
I find that saving every bit helps. I used to look at it as "Only $5? I can spend that, it doesn't matter." Now I look at it as "Only$5? I can save that! Every little bit helps!" It's $5 closer to my goals (whatever they may be-it would depend on which savings fund that money goes to!)
I am by no means condoning the behavior of devouring one's financial seeds before they have an opportunity to grow, but there really isn't a lot of incentive for saving these days. Money in the bank only loses value as costs continue to rise. The system (i.e. federal reserve) is pushing hard for people to spend everything they have, and then borrow more…
Hi Joe Morgan, it is critical for everyone to consider such issues during this tumultuous financial climate. Look for an update in the coming days which addresses some of these concerns.
I agree that saving little amounts does pay off. Most can simply look at their 401(k) as an example. It started off with nothing and through small deposits each paycheck grew into what it is now.
Every little amount saved helps. It's encouraging to look at my 401k every couple months and see how withdrawals have slowly built up to quite a bit of money. It takes these small savings over a long period of time to build true wealth.
I can't wait to get some money put away. I need a savings now more than ever. Great advice.
You've really got a great perspective on this, and I wish more young people would adopt this method of thinking. Saving your money and the compounding effects from the return on investments are so important to your future wealth! To pass this up is simply a disgrace.
BTW – the cat picture with the symbols at the end of the text was very cute!
I agree girl! People love to hack down their money tree and actually feel that they should be spending more than what they make! How does that equation balance? I don't know ;( It's all about increasing the cash inflow AND decreasing outflow!
I happen to work with a couple of people who earn > 120K a year who live week to week / pay check to pay check. What baffles me is that they often complain about never having enough money, despite earning far more than the average person could ever dream of.
What I find to be the biggest issue for them and many others is that they don’t budget and never track what they spend. To me it seems obvious that if you are always short of cash you should really start to examine your personal finances. This is true for people who earn > 100K or people who earn 30K. If you don’t know where your money is going, how are you ever going to fix the problem?
The way I see it is that every dollar you spend has lost the opportunity to gain compound interest for the rest of your life and bring you that 1 step closer to financial independence.
Many people don’t realize that those little items that you routinely buy (chocolates/coffee/Chips/Alcohol/Smokes etc) which individually don’t cost a lot of money, can really start to add up.
Anyway, great blog post! I look forward to reading more of your articles.
This is great, we're just really getting started with our budget/saving etc and I'm excited about actually having money in the bank for the first time in years. Hubby and I make good money but never took budgeting as serious as we should have until recently when baby girl was born and I started mat leave. Me losing more than half my income is the best thing that's happened to us (along with her).
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[...] Lynn @ Broke-Ass Mommy writes The Importance of Saving: Don’t Hack Down Your Money Tree – Even a little saved today make a big difference in creating a Money Tree. Start today, read [...]
[...] Lynn @ Broke-Ass Mommy writes The Importance of Saving: Don’t Hack Down Your Money Tree – Even a little saved today make a big difference in creating a Money Tree. Start today, read [...]
[...] The Importance of Saving: Don’t Hack Down Your Money Tree [...]
[...] The Importance of Saving: Don’t Hack Down Your Money Tree [...]
[...] Lynn @ Broke-Ass Mommy writes The Importance of Saving: Don’t Hack Down Your Money Tree – Even a little saved today make a big difference in creating a Money Tree. Start today, read [...]
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