My Family’s Money

There are a million and one ways to increase your savings. But for people like me, simplicity is essential to maintaining a long term involvement in managing money. If you make things complicated for yourself than you are never going to stick with it, because chances are you would much rather be doing something else. Using gimmicks and little tricks may provide some psychological benefit, but in the end I find that they add unnecessary clutter to savings goals and prove difficult to track – thus adding inefficiencies, frustration, and confusion into an otherwise simple equation:

The goal is always to save more money. Some people choose to do this by earning more, others by saving more (some even do both, hurray for frugal capitalists). Most people don’t really have a hard time over complicating the idea of earning more. That’s probably because most people have one job that they can easily track their income from because their employer writes them a check every few weeks and deposits it in the bank for them. Simple enough. It might get more complicated when a person is self-employed or when they have many different income sources that are constantly coming in, but this is naturally complicated. They didn’t artificially complicate it. Oh how I long for this type of complication!

Then there is spending less. Everyone and their mother seems to have a magic money saving dance that somehow taps into the power of powerless ancestral spirits, thereby transporting large sums of money into Magic School Buses that shrink everything and deposit them in your inner ear. Unfortunately, most people destroy this money carelessly with a Q-tip during their morning ritual rather than do the hard core Rumpelstiltskin and rip themselves in half, thus magically transform the small money into regular size money (that is what the fairy tale left out). Don’t worry the Magic School Bus will come back and sew you up.

Now most people really don’t do magical dances, but it sure seems like they do sometimes. Instead they come up with little tricks, like putting all your spare change into your savings account. Spare change? Are you going to get rich by putting that $0.72 into your savings account because you bought a 20 oz. soda from the supermarket for $1.28? Is that really saving? Investing your spare change that you created through buying stuff, though technically classifying as saving more in that you do put more money in the bank, is not really saving. It is like taxing yourself for making purchases that you probably should not have.

I say abandon these gimmicky approaches and simplifying your savings. Increasing your savings should be about:

1. … keeping more of the money you earn – this means that you need to actually spend less in order to keep more. Increases in spending are like a plague that eats away at future earning potentials by turning your current store of cash into someone else’s store of cash. This is good for their savings, but not for yours. Really reduce spending by sticking to the necessities. Buy stuff when you need it, go without it when you don’t.
2. … your long term objectives, not your short term realities -sometimes we just can’t help focusing on what is happening right now, but it really does help us when we step back and get the big picture. Your current want may be hindering your future want, so be careful what you give in to. Remember to keep a balance though, there are a lot of things that are more important than money.
3. … changing the world – you ultimately want to have a lot of money so that you can help a lot of people, right? Good, because I can’t think of a better reason to have lots of money than to do lots and lots of real good with it. Financial independence may be what some people want, but not me. I want lots of money so that I can increase the quality of life of thousands upon thousands of people.

Ideally, one day I will be able to generate massive amounts of income while spending such a small amount of it that I create this self-perpetuating world improvement fund that grows and grows while it helps change the world. I’m not sure if I will make, but I know that I’m going to try.

Why do you want to save more? What’s keeping you back from saving? Leave a comment here or feel free to send me your thoughts on my comment form.