August 3, 2020

Saving $1,000,000 is Easy, Saving $1 is Hard

It’s no secret that saving money is a key contributor to creating wealth. But, more often than not, people don’t realize the importance of the future or just find excuses to spend their money now. I’m hungry! My kid needs these Yeezys!

We trade our hard earned money for things that often fill a temporary craving (like ordering a pizza) or give us a brief shopping high rather than accumulate it to give us our freedom. Think about that! You’re literally telling yourself with each purchase that thing is worth more than you not having to work for the rest of your life! At least that’s the way I see it. I should mention, not ALL spending is evil. My sister literally texted me this morning asking if she should visit Sicily (she’s in Europe for a summer study abroad) even though it would cost her $100 to get there. I Venmo’d her $100 and told her to have a good time, without thinking twice.

The key is to evaluate every purchase you make and ask yourself if it will better your life or someone else’s. If you need to pay rent so you can continue having a place to live, spending that money will likely make your life better than being homeless. If you buy a new suit for an interview and it makes you more confident, it’s probably money worth spending. But if you see a hat on the way out that you want just because it looks cool, it’s probably not going to fundamentally better your life so take a pass.

As soon as you make it a habit to start framing purchases this way, it changes your mindset and in turn your bank account. In fact, as soon as you make it a habit, you’ve won. Habits are incredibly hard to break – as many of you may know from excessive shopping, or overeating, or whatever your vice may be. But once you flip that habit on its head, it starts to actually work in your favor.

$10 invested one month turns to $100 the next. And as you improve at saving and investing, that money starts to snowball into more than you thought you’d ever have. Perhaps even $1,000,000.

A helpful way to make saving/investing a habit without thinking, is to set up automatic withdraws through your bank account. All banks are different however I know most will allow you to set up automatic transfers from checking to savings accounts. And (don’t fact check me on this) I believe Vanguard will take deposits from your bank account automatically and invest it for you, if you so choose. This helps to make spending less tempting and it requires no effort or memory on your end. Win, win!

~Shorter post for today but there is some exciting stuff in the works, including my explanation and revamp of the blog directory as well as some awesome guest posts and a possible social media account for this site(?!) so stay tuned!!~

2 thoughts on “Saving $1,000,000 is Easy, Saving $1 is Hard

  1. I have Vanguard take a little each month into my Roth (from my savings account), so I can’t be a complete slacker. It’s easy to set up once you find the right spot on the website.
    I changed from having most of my paycheck go to checking, to savings. Then it can sit there and earn interest until an expense comes up. If nothing comes up, the money is already in savings.

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