Saving Money – It’s Not Just For The Wealthy, It’s Why They’re Wealthy

Do you have trouble saving money?  It seems you are not alone.  Prior to the Fall of 2008, the savings rate in America was negative 1-2%.  The floundering economy shocked people back to reality and the savings rate jumped.  This only proves the theory that saving money is tied to emotion.  When people feel they have to save—they can.

Instead of being something that we are scared into doing, savings should be something we do naturally and regularly.  In short, it SHOULD be a part of your financial plan—no matter how much money you make.  I often hear excuses as to why people do not save like they should.

The most common excuse is that they do not make enough money to save.  They are not wealthy enough?  Perhaps that line of thinking is backwards though.  What if wealthy people are wealthy because they have good savings habits?  They save first, and have fun second.  Saving money is a priority and should be treated as such.

I happen to know why people don’t save.  It isn’t because they don’t make enough.  It is because their income is stretched to the max due to an outrageous number of payments.  That’s right!  You don’t save because of debt.  One thing that wealthy people share in common with each other is that they have very little debt, if any at all.

If you didn’t have so many payments, you could be saving money for the following:

• emergency fund
• future purchases
• retirement
• college planning
• vacations
• holidays and birthdays
• irregular expenses
• wealth building

Savings can be used to help prepare you for anything.  The important thing to know is that you MUST make it a priority. Being prepared for your future is an important component to becoming more self reliant.

If you currently do not have any savings then now is the best time to start saving money.  Here’s where you should begin:

• save at least $1,000 for your baby emergency fund
• pay off debt as aggressively as you can (remove the obstacle)
• save 3 to 6 months of expenses to complete your fully funded emergency fund

Once you have done these three things you will notice that your ability to save for your future will be much easier.  One of my favorite speakers on the subject is Dave Ramsey.  He often says that if we want to be rich, do what rich people do.  Mimic the habits of rich people.  Poor people do not save money, which is why they do not have any of it.  Do what rich people do!

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Brad Chaffee is the Enemy of Debt, and a regular contributor here at Self Reliance Works. Brad has also become debt free by paying off $26,076.75 in just 20 months. Learn more about Brad by reading his bio. You may also contact him at his blog.

This article was featured on a blog carnival at My Wealth Builder.