Kudos to anyone who can figure out where the title to today's post came from! I'm using it to illustrate how we don't use the passage of time to value our money. We're so busy living from moment to moment that we don't think of where we'll be ten years from now. And the future is really something we freelancers should focus on.
There have been many laments in the media about how we're not a country of savers anymore. To an extent this is changing. Average account balances on credit cards are lower and more accounts for saving money have been opened. But is this a direct correlation to the fact that there are less jobs out there? And that the new jobs that open up pay less than before? Or has the American public figured out that saving's a good thing instead of playing keep up with the Joneses? Only time will tell if we've learned our lessons about free-wheeling spending.
What I'm getting to is that no one is really taught to save money anymore. It's all about instant wealth overnight. I'm sure there are those who get lucky and manage to grow their bottom line very quickly. But it really is about luck. Or being a good spreader of bovine fecal matter. Whatever the case may be, the rest of us folk have to work on our wealth in a tried and true manner.
The easiest way to get ahead is to put some money aside and forget it exists. Put it in a money market account, a CD, even US savings bonds. You want the money situated where you can access it in case of emergency and earning interest when it's left alone. Get there by setting aside a certain amount from every payday and make it inviolable. To borrow a phrase from Clark Howard, pay yourself first. He suggests 10% of every paycheck goes into savings. Your own situation may only permit so much extra. But take something, even if it's .5% and set it aside. Heck, take some pocket change or a couple of singles out of your wallet a few times a week. You'll eventually discover that you'll have a nice cushion after a few months to a year.
It should be much easier to keep saving money when you see what you've been able to do with it. Your effort is small, but the rewards are great. Saving money in this manner is simple but effective. You may find some peace of mind knowing there's something in the bank, possibly even easing up the feeling that you're living from paycheck to paycheck.
Squirreling money away sets you up for bigger goals. Once you've got a couple of thousand or so set aside, it's time to consider investing in long term funds. These are funds that have a steady rate of return over time but aren't meant to be watched day to day. It's entirely possible to have an amazing nest egg built up over the years and help pave the way for your larger life goals.
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