Today, I took a moment to create a spreadsheet to help keep track of the money I am saving for the 2012 Alpha Phi Omega Biennial Convention that will take place in Anaheim, CA. Of course, I have heard complaints that it is WAY TOO EARLY to be saving for that. The statement made me start to think. Is it ever too early to save money? No matter what you are saving it for, is it ever too early? Sure, I should have quite a few paychecks before that time, but if I took at the most, $20.00 out of each weekly check, I should have approximately $2,100.00 by the end of December 2012. There are those people out there that believe this disk of drawn figures from the Mayan civilization says we may not even be here then. In reality, is there any promise that we’ll be here in February 2011? Think about it, will ya?!
A common example given in many financial classes and in seminars is that of a young child. If the parent wanted to, and did not trust banks (I don’t particularly trust them either as many around GA are falling to the FDIC), he/she could take a safe or small vault and each week, place $20.00 back for savings. By the time the child reaches five years old, there would be $5,200 saved. By the age of ten, there would be $10,400. By the time the child turned 18 and was able to go to college, there would be $18,720 available to pay for the child’s education. That’s simply using common sense and the ability to leave the money alone. The parent must be able to leave money where it is and not spend it on selfish wants and desires.
Take that same person, but this time, he/she believes in the banking system in our country. Say the parent places $1,000 into a savings account with a 6% interest rate, compounded annually, and the parent added $1,000 a year for 18 years, there would be a total of $35,614 available. Say that the child, at the age of 18, decided to take the money his parents saved for college and place it back into an account with the same amount of interest, adding $1,000 at the start of each compounding period himself, and not touching it till he turned 65 at retirement. He could have a total of $806,367 to live on for some time. I don’t know about you, but that is an amount I could deal with. Of course, there probably wouldn’t be any life changing trips, but I could live comfortably.
The base point is that it is never too early to start saving money. With the economy as it is, people are hurting all over the world. I would love to think I am comfortable with the way my financial future is looking. If I said I was, I would be lying. I haven’t been the best at saving money throughout my life. I once saved a bit of money before heading to college, but due to someone in my life royally pissing me off, I acted hastily and stupidly, taking a bit of money out of the fund until I had bled it try and left myself with nothing. It was foolish, but that was a lesson I had to learn on my own. Actually, it was two lessons. Don’t throw your money away to get back at someone and don’t allow anyone in your family to place restrictions on money that you worked for and saved on your own. If you earned it, it’s your responsibility to learn how to manage it. You will never learn if aren’t given the opportunity.
I am happy to say that as of the third paycheck of 2011, I have $60.00 and I can’t wait to add more to it.