When I was five years old, my Aunt Carol gave me $5 for my birthday. She said, ”Put it in the bank; it will grow.” My Dad always said “A penny saved is a penny earned.” Now that pennies are extinct, I think it should be “A nickel saved is a nickel earned.” For a few years, I would put any money I received as a gift for my birthday, Christmas, etc. in the bank. My savings started to grow! I am sure a lot of you did the same thing. The problem was, when I was older, I ended up spending it all. Does this also sound familiar?
What if Aunt Carol had suggested that I start a savings plan of putting $5 into the bank every month? After 48 years, from then to now, I could have saved a grand total of $2,880. This is where the “penny saved is a penny earned” part kicks in. In reality, if I averaged 5% interest over those 48 years of saving, my $2,880 would actually be worth over $12,000. Now that’s a lot of pennies!
So why is saving money so tough? Is today’s debt heavy, marketing overload, affluence seeking society winning the war for our hard earned dollars? It’s David versus Goliath. So let’s use their strength against them. “What is their strength?” you ask. It’s the good deal, the 40% off, the ‘BOGO’ promo. How can we use this strength against them to save money? It’s simple.
My wife tells me almost every day how much she saves. “Look at this honey; I saved $40 on these shoes!” Unfortunately she had to spend $180 to do it. We all save money like this every day. It would be very difficult to save the savings my wife generates on a regular basis, but what about the savings you get every time you go to the grocery store? Every grocer has weekly specials and deals on items that are on your grocery list. For the savvy shopper, weekly flyers and coupons can add up to big savings every time you shop.
So here is how you do it:
- Open a savings account. Set it up so you can transfer into it from your regular account.
- Make your grocery list and take it with you, along with a pen, when you go for your groceries.
- Mark the savings gained beside each ‘on sale’ item on your list. (Not your favourite ice cream that you just had to buy because it was on sale – unless it was really on the list!)
- When you get home, add up your savings and deposit/transfer the total into your savings account. It will grow.
Once you start, you will find yourself trying to save more on your groceries, just so you can SAVE YOUR SAVINGS!
By all means, expand your savings plan to other things if you can. Groceries can be the foundation for regular savings. Shoes can be a bonus item, for example. It’s up to you how aggressively you want to SAVE YOUR SAVINGS.
Take the challenge. Make it a new habit. You may not have 48 years, but give it 52 weeks. You will find the results truly amazing! My wife now thinks twice before buying items on sale, considering the necessity of the purchase. That alone makes this savings plan worth every penny; I mean nickel.