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Post date: Apr 25, 2012 4:26:34 PM

Saving and Spending Early in Life

Recommended Reading:

Rich Kid Smart Kid: Giving Your Child a Financial Head Start

Smart Money Smart Kids: Raising the Next Generation to Win with Money

In an earlier post, I left off with my teenage savings account accumulating $25 per month but going nowhere. My mom started me on the right path by setting me up with the account, but I never picked up on how or why to save. Hey, what teenager would?

Before long, I was transferring money back to my checking account to cover teenage expenses. I saw the meager savings totals and questioned the point of it all. Whenever I got a lump sum of money, I was quick to spend it because I had no base savings to add it to.

I really have no one to blame but myself for this start in life. I guess no matter how many times we're shown something, we still need to make our own mistakes and learn our lessons. Seems like personal pain or struggle sticks better than lectures. Back then I thought it was all about wearing name-brand clothes or driving new cars and didn't care about the long-term costs of each dollar I spent. 

I can't believe how excited I was when Jack Weber Nissan "let me" drive home in my new 1994 Sentra SE-R. I thought it was the coolest thing in the world. I had it made living at home, paying no rent, and actually told people I would rather drive a nice car than live in a fancy house. What was I thinking? My job at the time barely covered the car payment, gas, and insurance! I'll probably elaborate on this experience later on.

Now I know that I can own nice things, with a sound financial plan. The pain of paying extra for things taught me the value of saving and owning over-borrowing to get what I can't afford.

Don't be a "Slacker!"

What are you saving for?

Some people simply save for the sake of saving. Let's say you've gotten past step one and figured out a budget to save $100 per month or some percentage of your income. What inspires you to stick to it? What happens if your neighbor gets the latest model of this or that, the new housing development in that nicer part of town finally opens its beautifully decorated models? What if word gets around that you have a little money put away, and someone needs just a little help to get by. Nothing kills a savings plan faster than a new loan payment or a family emergency. It's too easy to fall back into "paycheck-to-paycheck" mode, struggling to get by.

With knowledge, support, and discipline, anyone can attain financial freedom (yes, even working for "the man").

First, educate yourself on ways to save money, either by cutting expenses or, heck, why not by increasing your income? Look for budgeting books at your library. By the way, libraries are perfect for cutting costs! Researching the web for knowledge doesn't cost money either.

Remember: Google is your friend.

Beware of advertising on most websites. Plenty of examples on this very page! You could easily click your way deeper in debt looking for financial freedom! A favorite free budgeting site I use, Mint.com, lets you plan and monitor your spending.  

Mint.com  is a good start for support, but you need people behind you as well. Be sure your family is on board and stick with advisers who look out for your best interests - not those of the bank or insurance company!

Finally, the key to it all is discipline. Remember, YOU have the ultimate say in what you spend your money on.

Photo from http://www.thediabeticscornerbooth.com

In future posts, I'll break down ways to increase knowledge, find support and stay disciplined, including sharing how I found trusted advisers who helped me as well as a few who were looking out for their bonuses.

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