Long Term Savings and Inflation
I do not think I ever realized how important saving money was, or how my future was going to be like. I always had this mindset that I am going to get a scholarship and that I was just going to let the future happen. Of course, as I grew older, I found out that surprisingly, life does not work like that, I could not just let myself do whatever I wanted and hope that life’s misfortunes would skip me and move on to the next person. This presentation has been an eye opening experience, although, what really stood out to me was to start saving as soon as possible and inflation.
To tell you the truth, I do not believe that I have ever successfully saved up money for a long period of time. It is so important to save money, because you never know what will happen, no one is prepared for a family issue or life’s unexpectedness. Saving money as early as possible is a really easy life lesson that I always ignored. There was a specific part of the presentation that I remembered because it was so mind blowing, “Don’t buy a car, unless you can afford 10 cars.” I have never thought of life like that, I just thought of buying stuff like, “I have the money for it now, so I’m going to buy it now,” and then I was going to deal with the consequences later. You will not be financially independent if you do not start doing some long-term savings. These short-term savings used just to buy a T.V, could be part of the savings to rent out an apartment. Borrowing money through credit cards and continually spending credit card money will end up getting you in debt if you cannot pay for what you owe. I do not need to go to every school dance, I do not need to go to every party that is being hosted, as an adult, I do not need to go to bars every weekend; it is by reducing these small “everyday” things that is going to make long-term saving successful. It is never too late to start saving money, this is a lesson that I’m going to teach my children.
Honestly, I have never heard of inflation before this presentation. Now that I do know what it is, it kind of goes hand in hand with long-term savings. Inflation has been growing at a 3% rate every 100 years, your money is losing value if you do not save. $1 in the past, was worth way more than $1 right now. As time passes, you’re going to need more money because everything will get more, and more expensive, and if you keep having this stubborn mindset and keep believing that your retirement money will be the same as your children’s retirement money, then you are terribly wrong. Retirement money comes from social security, pensions, and personal savings, but really, it is mainly personal savings, which is why saving money as early as possible is so key to living comfortably. Do not rely on friends and family’s pity money that will not last long, make an effort to make your own money and save your own money. Things like doming with roommates during college, buying used textbooks during college, cooking at home instead of going out to eat everyday are things that I consider because why would I waste money that could be used for more productive things. Most adults do not even know what inflation is, and if they did, they would not be throwing money at people like they do not have to pay child support or pay their bills.
Educate yourself and learn about stuff like the Rule of 72 which is always knowing how fast your money will double, reduce the impact of taxes to live the life that you wanted and not let money be an issue to strive for the goals that you want in life. This life is so short and if you’re letting money hold you back, that is the sadness excuse that is not supposed to be a problem if you, personally, are making the right choices. Save money for the long term and know how to deal with inflation to get the life that you deserve. Don’t rely financially on other people, get the life that you want using your own money and willpower. College expenses, family expenses, and life expenses are struggles that everyone deals with, but let yourself be part of the people that deals with it, without it having to be a burden on your life.