Every Penny Counts
Money may not buy happiness, but the stress that comes with worrying about paying the month’s rent or a student loan definitely keeps it away. It is easy to make lofty statements, but the truth is that financial security is the stability that allows people to even begin to think about happiness. No one wants to be told that they can’t attend the school of their dreams because it costs too much or that they can’t buy house because they don’t qualify for a loan or that they don’t have the means to provide the medical resources a loved one needs or that they cannot retire because their savings are insufficient. By living within economic means, saving more than I spend, and being deliberate in choosing where to place savings, I will be able to pursue my goals without having these fears.
One of the most basic ways to be successful in managing money is to live within your means. To me, this means understanding your financial capacity in your situation and using that as a boundary to live within. Even though this will probably feel very restrictive at times, I know that it will be more freeing in the long run. Being free from the stress that financial instability and debt bring will undoubtedly be more liberating than careless spending ever could be. It is important to remember that my financial journey is one that I have to undertake on my own, and so it is ignorant to compare my lifestyle to anyone else’s. Rather than spending at the rate of the society surrounding me, I must learn to set a standard for myself within which I can live comfortably without creating financial burdens for the future. Now and in the years to come, I know that cultivating this habit of distinguishing necessities from luxuries based on my financial situation will be an indispensable skill to have.
The second rule to hold myself accountable to is to always save more than I spend. Approximately half of the nation’s population lives a paycheck to paycheck life- one where they are completely unprepared for any sort of emergency or change. In order to have security in the form of savings, I know the importance of starting to save as early as possible. Over time, pennies can add up to enough to cover me in case of unemployment or medical bills. The peace of mind that comes with having savings is a valid incentive to always remember to spend only what is left after saving. Saving money should not be where leftover money goes but rather a priority. Choosing to save for the long term rather than reaching for those heels that will bring instant gratification is a habit worth forming.
Knowing where to save money is just as important as saving it in the first place. Over time, savings become insufficient if the rate of return does not keep pace with the rate of inflation. Financial literacy is important because hard work amounts to nothing if the money I save is not put to work in a place where it will grow in value until I need to use it. Time can be a huge asset in helping my savings grow as long as I understand what to look for in a rate of return.
Overall, I feel extremely fortunate to have been able to learn about such a major part of being financially successful and stable in the future. I know now that the future begins now, and it is never too early to make the right decisions regarding money. By living within my means, saving more than I spend, and making sure my savings are growing will allow me to set daring goals for myself and be able to pursue them. Money should be a stool to step on to reach goals, not an obstacle, and with the information and knowledge shared with me through Think Tank, I know how to make this a reality for my future. I know that, in part, happiness will come with the satisfaction in knowing that I have a financial cushion, rather than an abyss, supporting me from behind.