We all know you need to save money. But what you’re really trying to do is save for your freedom!
Everyone makes sure to tell you to:
-Save for a downpayment on a house.
-Put away for college.
-Invest for retirement.
Yes, you need to save money, but those big-ticket items can seem so daunting and out of reach!
-Houses are hundreds of thousands of dollars.
-College is tens or maybe even hundreds of thousands of dollars, depending on where you plan to attend. (How to Pay for College Debt Free)
-Retirement is millions of dollars for many and 30+ years in the future.
It is hard to think about these items when you are just trying to scrape by with your paycheck now.
But saving money is important, right now. You need to save for your freedom!
Saved money IS freedom. It is your freedom to choose if you can do what you want when you want. Putting a little bit of each check away, every check, will help you to gain just small bits of freedom as the years go on.
Save for Your Freedom- Don’t Be Afraid to Start Small
Put away whatever amount you have available. Even if it is only $10 a week, that’s $520 by the end of the year.
$520 can be the difference between being able to buy new tires for your car with cash, having to go into debt by putting them on a credit card, or worse, chancing a blowout on the freeway.
I rolled a jeep once in college because the tire blew out. I rolled across 2 lanes of traffic and ended up facing backward in a ditch.
Luckily, I didn’t hit anyone else and only ended up with bad whiplash, but it totaled the jeep and ended up with some hefty medical/ambulance bills. Take care of your tires!
Make It Automatic
Make savings an automatic habit.
- Set Up A Separate Savings Account– open an account other than where your regular checking account is, this way you won’t see it as often and will be less likely to touch it.
- Open it at an inconvenient location-get it at a bank across town, or an online bank with higher interest savings accounts that you don’t check often
- Set-Up Direct Deposits every paycheck– if your job does direct deposit, see if you can set it up for payroll to deposit a portion of your check, directly into that “hidden” bank account
- Set-Up Auto Transfers– If you have to physically deposit your check, have an automatic transfer happen right after you regularly deposit it. (Like you know you get paid Fridays, and you always deposit your check Friday or Saturday morning, set up an automatic transfer for Monday or Tuesday, after the check has cleared.)
This is called “Paying Yourself First.” Your saved money is automatically put away for YOU before you go and pay bills, go out with friends, or do whatever spending you normally do. (How I Hide Money From Myself By Making It Automatic)
Check out my articles about where to put your savings for specific purposes and priorities to build your wealth, but for now, make general savings a priority! Get used to not seeing that money. Not spending that money. Don’t even acknowledge you ever had it. Because as that money builds, it will give you more freedom than you know.
It Really Adds Up
Say you’ve been putting away 10% of your check every week. When you’re first starting out, this may seem like a huge sacrifice. But, within 10 weeks, you will have saved up the equivalent of a week’s worth of wages. (Less taxes and benefits) This is where you start to buy your freedom.
That is one week, that if something horrible happened and you couldn’t work for a week for some reason, you would be ok.
If you save 10% of your income for 10 months, that is 1 month of freedom you could buy yourself.
That’s enough time to
- Find a new job
- Take care of a sick family member who had surgery
- Take much-needed time for yourself,
Without worrying if you’ll make it if something happens.
As time goes on and you get better, higher-paying job raises, and/or bonuses, you will already have those savings muscles built up. You’ll be used to putting away a part of your check and not spending it. Those bigger checks can be used to put away higher percentages of your paycheck in your savings.
Wrap-Up
It doesn’t take a big paycheck to build wealth. Have you heard of the philanthropist Ronald Reed, the janitor/gas station attendant who left behind an $8 million estate when he died? He didn’t do anything amazing, he just lived below his means and made savings and basic investing a regular and automatic part of his life.
Now, if you’re not already, set up a regular and automatic way to Pay Yourself First so that you can buy your freedom, a little bit at a time.
Save For You Freedom
- Don’t Be Afraid to Start Saving Small
- Make It Automatic
- Over Time, It Really Adds Up
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