WHEN YOUR earnings are small you probably don't think about saving or investing your money. But, unless you make an effort to save and invest, chances are, you will never put yourself in a position to have your money work for you. Making this effort is called 'paying yourself first'.
Saving leads to financial literacy, but requires discipline.
Choosing to be a diligent saver is endlessly beneficial, and requires a lot of discipline. Besides the obvious money-making possibilities, saving teaches an individual to become financially literate. Financial literacy can be interpreted in many ways; for now, let's interpret it as understanding how one either maintains or improves his/her financial situation.
How is this financial literacy achieved? It is done through planning for the future, budgeting and investing so that your money starts working for you. When this is done, you will likely increase your chances of financial success, while reducing your chances of financial struggle later on in life. This means, therefore, that a good saving habit should begin with regular savings as early in life as possible. Delaying this habit will lead to many regrets and less benefits in the long run.
WHERE SHOULD YOU BEGIN?
The most important financial decision one can make early in life is to make regular deposits into a savings account, while spending responsibly and investing wisely. Saving is the most basic step toward achieving financial freedom.
Therefore, one must begin this discipline at a young age. While children are in school, they should be taught financial independence, as this is the only way they will understand from an early age why it is important not to waste and squander money. The mere act of opening a savings account for a child and encouraging him/her to put some of his/her allowance in it, will encourage discipline and excellent money management skills at this tender age.
Many people, especially teenagers, have no sense of financial responsibility and have no respect for money or its enormous power. They are not raised to appreciate how much work goes into earning money. Consequently, they spend endlessly without recognising how their spending extravaganzas affect their financial future and the future of their families. On this subject, Ron and Judy Blue, authors of Raising Money Smart Kids, write, "A dollar spent today does not take a dollar out of the future; it takes multiple dollars out of the future." Understanding this fact encourages someone to exhibit foresight realising that saving a little now can save a lot later.
SAVING CAN BE FUN
Saving can be fun if you anticipate the future pleasures that it will bring. Of course, it could be in the form of education for yourself or the children, paying off your mortgage, being able to retire in comfort, or even taking those long trips you have always yearned for. There is no doubt that when your income is low and inflation is high, saving is sometimes the last thing on your mind. You should, however, realise the importance and value of regular and planned savings, and that while it requires constant sacrifice and self-denial, the expectation of greater satisfaction in the future is worth the sacrifice.
If you don't already have a savings account, start one today, and always remember saving is the first step to wealth creation and always strive to be penny-wise, that is, find uses for your money that will increase your wealth.
To further discuss investing and the many options we have available, contact DB&G at info@mydbg.com or toll free at 1-888-CALL DBG.
Disclaimer: All information contained in this article has been obtained from sources that DB&G believes to be accurate and reliable. All opinions and estimates constitute the author's judgment as of the date of the article. No warranty as to the accuracy, timeliness or completeness of this article and as to the opinions based thereon is given or made by DB&G. DB&G and/or its employees or directors and/or any associated person may have an interest in, or interest in the acquisition or disposal of, the securities or class of securities mentioned herein. Call 1-888- CALL DBG if in doubt about the content of this article. Decisions based on information contained in this article are your sole responsibility.
