The first thing we have to do is modernize this cliché. Maybe a dollar saved is a dollar earned?
The underlying message, however, is still strong and possibly more relevant today than it was when it was first coined. Get it?
Whatever denomination of currency you would like to use, once it is spent it is gone and unless you have spent your money on a rare work of art or a gold bar, whatever you spent it on is immediately worth less than what you spent. Money saved, on the other hand, almost always appreciates and is then worth more than when you first saved it.
Common sense? Maybe, but I will tell you that I am concerned about what appears to be a changing attitude toward the importance of saving. I review a lot of personal financial situations and very few of them include any savings at all.
Contrary to what you may think or might have heard, the ability to save is not reserved for the wealthy. In fact, the opposite is true. Wealth is created by saving and investing, even if it is a few dollars at a time.
In a quick fix, only today matters type of society, it is too easy to discount the importance of saving and investing, but saving money transcends time. If you have saved a few dollars in the past, you have a few more options and opportunities today. If you save today, the same is true tomorrow.
So, the question becomes how to get started. My advice is to start with what you currently have and keep it simple. Look at your spending habits over the last 60 to 90 days and ask yourself this question, what was a need and what was a want? Needs are necessary. Wants are not. Needs are essential. Wants are nice to have. Select just a few (not all) of those wants and add up what you spent on them. You may be surprised at what you could save just by setting aside the money that you spent unnecessarily.
I see those pennies piling up already!
By Scott Arney, Chief Executive Officer, Chicago Patrolmen’s Federal Credit Union.
This article is part of Arney's new series, entitled A New Use for an Old Cliché.
This installment is part of Arney's educational series, entitled The Serial Decision Maker.