Disciplined Saving & Investing 

It’s time to tackle a very troubling habit that we as a society engage in.  It causes us much uncertainty and

sometimes a great deal of stress.  I am talking about a lack of savings and investing.  “If you would be wealthy, think of saving as well as getting.”cxxxii 

The instant gratification that we get from buying “stuff” causes us to fall far short of any savings or investing that we need to live a successful life.  Let’s first look at the facts:  As a society we actually have a negative saving rate.  That means we spend more than we make.  I did some research and found the following information.  In Japan, people on average save 27% of their income.  Here in the United States, that amount is actually negative.  Our average net worth is around negative nine thousand dollars. 

We are the richest society on earth, but we still cannot get ourselves to save.  To put it another way, we spend about 103% of what we make.  We are making foolish decisions and it needs to stop.  “The wise have wealth and luxury, but fools spend whatever they get.”cxxxiii  It’s time to begin making smart choices and decisions that will lead to success in our finances.  We, as a nation, have amassed over 27 trillion in debt.  This makes your share over $83,000cxxxiv.  If you are not in the United States, the best advice I can give is to adopt good habits now before they take you down a road you don’t want to be on.  

What most people don’t realize though is that the solution to creating more wealth in your life is not to just make more money.  That helps, but only if you have developed the discipline to save and invest.  The solution lies in learning how money works.  You must learn that by saving a little bit every week or month, you will grow your savings and investments over time. 

You must be saving and investing at least 10% of your income.  You must develop the habit, however painful, in order to begin making real progress.  You must take the time to research your saving and investment options so that you are able to make informed choices and to stay current about your finances. 

Saving and investing serve different purposes, but if you develop the discipline to do one, the ability to do the other

should come naturally. Saving money is for the short term, while investing is for the long term.  The methods and ideas for helping you achieve success will work interchangeably.  You should spread your savings and investments out over several different options, “…divide your investments among many places, for you do not know what risks might lie ahead.”cxxxv  

It’s a known fact that most people save and invest nothing.  If they do, it’s usually not enough to make any measurable difference in their life.  The good news is, that even if you have never saved or invested, you can begin right now. 

Having savings and investments are important.  If you have an emergency fund, car repairs, home expenses or unexpected fees will not become a financial burden.  You can also save for things that you want, such as vacations, a new car, a house and college tuition.  These can all become a reality when you learn to put money aside.  You should also be planning for your retirement.  Don’t rely on other people to take care of you.  The bottom line is, that when you do these things, you will find less stress and more success and happiness. 

I have included some tips to help you begin saving and investing.  There are many different things you can do besides what I have included here, but you can use these ideas to get you started: 

• Try using direct deposit, if your employer offers it.  The less you handle the money directly, the better off you will be.  You can also direct a certain amount to go into savings and investments.   
• Some banks have programs where they will round up on purchases and deposit the extra money into a savings account.  For example: If you buy a sandwich for $4.50, they will charge you $5.00, but the extra 50 cents will go into your savings account.  
• Avoid overpriced “extras” that really don’t add value to your life.  Make your coffee at home or bring your lunch to work instead of going out. 
• Pay yourself an established amount each week or month before you pay your bills and expenses.  Do this no matter what.  If you wait until everything else is paid, there may be very little for you.  
• Wait at least 48 hours after deciding to purchase big-ticket items or sign contracts and obligations before taking action.  This will help you decide if you really want or need the item. 
• Create a retirement plan.  Whether it is a 401k at work or an IRA, get it started and make contributions. 
• Make a commitment not to pay full price for anything.  Plan your menus based on grocery store sales or wait until that electronics store puts the computer you want in their weekly flyer. 

The point is to do simple things that add up over time; these simple things will become habits which will become effortless over time.  Before you know it, you will be on the road to saving and investing success.