From Spender to Saver

When I was quite young (6?), my mom helped me open a bank account and taught me the principle and benefits of saving. At the age of 16, I learned about compound interest, Roth IRAs and other things that could have really gotten me off to a great start.

But I consciously chose to spend my money instead of saving it.

I valued independence more than anything so I bought my own car and paid for my own insurance and fuel. Saving money when I was earning only a small fraction of what I would earn post college seemed futile. Why would I save 40% of my income then, when that amount would equate to only 5% of my income later? My best saving efforts would still only result in maybe $12,000 over all of my teenage years and through college ($8/hr just doesn’t go far), and for some reason I always genuinely believed I’d be making a $100k salary when I graduated. That would make my entire childhood savings seem so pithy!

I actually still think that’s a valid argument IF you know you’ll for sure be making a lot of money in the future. But I’d gladly go back to visit my younger self and recommend saving 50% of everything I made. At the very least, I’d convince myself to always have at least $2,000 in a money market account so it could accrue some interest over the years and be there if I ever needed it (while I was at it, I’d recommend getting a piece of Google’s IPO, but that’s neither here nor there).

It wasn’t until I got married that I realized how satisfying saving can be. We were in school for the first little while, but when we both started working full time, we were able to put several thousand dollars away every month for almost a year. I had never before experienced the thrill of saving money, and it easily beat the thrill of spending, not to mention the fact that it wasn’t so short-lived!

For The Fiery One (my wife), saving provides needed security. She needs to know three things:

1 – We have money for a rainy day, or a hot day when our A/C unit dies

2 – We’re spending less than we’re earning

3 – We’ll eventually be making “ideally about $200 thousand per year.” [I laugh] “What? Does that seem high to you? I mean, that doesn’t seem high in the LONG run. What do you mean by eventually?”

Really, she’d be fine with a much smaller income than that. She just needs it to be steady and predictable.

For me, saving definitely provides security. It also makes me feel in control of myself and my life. And perhaps most important to me, it builds a foundation for my family’s future. As long as I can control my spending today, I won’t be bound to unnecessary debt. Saving does just the opposite (binds other people to my debt!) by ensuring my family is provided for and opening opportunities to travel, pay for piano lessons, etc.. It’s certainly not worth sacrificing everything good today, but it’s definitely worth being frugal.

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