Kalis C. – City Honors College Preparatory

Essay Challenge

My mother always told me, “Do not save what is left after spending, but spend what is left after saving”. This saying stuck with me over time, but I never truly understood its meaning until I recently attended a workshop hosted by Nuvision Federal Credit Union.  The experience opened my eyes to the value of saving money. The workshop explored tips and techniques young people could implement to become better savers.  One of the most important concepts discussed was the Wealth Formula. Ruth, the presenter, explained how this method could assist young people in creating long-term savings that would equate to future wealth.  She listed three fundamentals of this concept: time, rate of return, and taxes.

She described time as an instrumental contributor to wealth or the worst enemy when it comes to financial health. When it comes to time and the Wealth Formula, the earlier you start saving, the more wealth you can generate.

Rate of return involves the gain or loss of money over a given time period. It is typically expressed as a percentage rate. The rate of return can tell you how many years it will take for your money to double.

Taxes are contributions to the state revenue that are required by government in exchange for its services and support.  Ruth explained how the government imposes taxes on everything from paychecks, to a person’s funeral! This motivated me to start saving early so I would not become financially challenged.

Another presenter at the workshop was a retired Police Captain who expounded on this point by sharing how he started saving 15% of his gross income, which is the money he earned before taxes were applied.  He stated the money began to accumulate quickly and it inspired him to save more. Eventually he was saving 30% of his income which earned him the opportunity to retire early because his was able to generate enough wealth to comfortably support himself in his post-employment years.  To me, that was an amazing accomplishment!

This workshop inspired me to think about ways I could increase my earnings and live debt free.  I plan to use this new information by saving my weekly allowance instead of spending it on a movie ticket.  When I do go to the movies, I take advantage of the student discounts at the theatre and other stores that offer it.  I have taken on more chores and small jobs with my family and within my community in order to earn a few extra dollars. I am becoming an entrepreneur by finding ways to market my skills, like becoming a tutor for example.  I host garage sales on weekends to sell quality items that are not being used and original artwork that I create all in efforts to increase my earnings. When I receive monetary gifts, I add them to my savings account instead of spending it, like I did before. These additional funds will allow me to save money for my future college expenses and unexpected emergencies.

Before this workshop, I did not see money as an investable asset.  Now I understand that saving is the first action I should take when I acquire or earn money, and I am careful when making purchases, choosing to spend money on necessities over wants. I have recently begun exploring high yielding bonds and tax advantage savings plans with my parents so I can get the most return on my investments.

In all, I learned that financial independence can give a person peace of mind and saving is crucial to reaching this state of serenity.  I would advise all young adults to begin saving early so they too will have enough time to become a millionaire.   Becoming a better saver and living a debt free life will guarantee that you will be ready for the future.