Money On Hand Helps
Occasionally, we meet people who either say or demonstrate something that impresses us.
One such person, in my youth, was a neighbor that I observed with a different car in his drive. When I asked about it, he noted that he got a deal because he had cash in hand to buy the car outright. He explained that he always kept at least $300 cash on him to be able to take advantage of bargains when they appeared.
Yes, cars were much cheaper 30 years ago. But the point is do you keep any cash to take advantage of deals that may come your way?
Having money in hand can help you save on necessities also. Whether it is something you need that is available at a garage sale or a bulk sale on canned food you eat often, you can spend to save!
Build Your Platform
Sure, you may not be able to do that now. But, over time, you can build your platform to shop for bargains while avoiding debt to do so.
Debt voids your savings. Prolonging payments to buy things only adds to the cost, thus shrinking your platform to save on deals.
Your platform is related to a better mindset for money. With cash in your pocket, you are prepared to take advantage of most situations where money can be saved on a planned purchase or a viable profit opportunity. Buying cheap to sell for a profit on an item many others need becomes an income option that is outside a regular job. Added income will add to savings or funding for the next bargain.
In fact, I suggest you keep that cash in a separate place from your bank account which is used for paying your monthly bills and expenses.
From Little to Lots (Not Things)
We all have an opportunity to grow over time in our knowledge, our skills, and our ability to manage our money.
Whatever growth we experience will be in proportion to the time and effort we put into encouraging that growth. It is not the wishing that helps. It is the action we take that causes our growth in those areas.
Persistence will lead to accumulation. And accumulation of knowledge and skills will help you accumulate money, if you learn to manage it.
Be like the farmer who raises cattle. Patience must be mixed with persistence and knowledge and skills with the care of his livestock. He learns to use the pasture and when to feed grain and hay to prepare them for going to the sale barn. And the farmer plans for the natural increase in the herd numbers.
Like the farmer, you can become persistent with increasing your herd of cash and preparing to make the best of that pile of cash where needed goods are sold, be that in a store, a garage sale, or an auction!
That kind of money management skill will accumulate to your benefit. Though it will take more time than you may like, once started the savings will build faster than trying to buy bargains on credit. The accumulation of savings will bring you peace of mind and a sense of accomplishment when you find yourself in a debt-free position that allows you to find more ways to save on your living expenses.
A Mindset to Save
Making saving a priority is a change in financial philosophy for most of us. After all, we are trying to enjoy life, and we work a job to make that happen.
The term saving connotes sacrifice for most of us. And sacrifice is not synonymous with having fun.
So, how do we change that perception to create a better mindset to save?
If you have read about time management, you will recall several references to giving levels of priority to items on your list of things to do. The same goes for setting financial priorities.
Of course, you have a list of bills to pay each month. Then, you have estimates for things like groceries, gifts, fuel, and entertainment, which seldom stay within the budget expectations. And, no doubt, most people do not put saving on the list as if it was a bill.
The best trick for good financial strategy is to make “paying yourself” a priority. Make it your number one priority!
After first adding to your savings on each pay day, those categories of spending which use up the rest of your income will be limited in size and will allow you to be less stressed when the unexpected expense shows up, because you have reserves to take care of the problem!
Pass On to Others
There is a well-known phrase in the retirement community, especially with those pulling an RV to see the country, which says, “I am spending my children’s inheritance!”
Before you make that part of your retirement financial planning attitude, I want you to consider what an inheritance would have done for your financial situation. My wife and I have each benefited from an inheritance from our parents. If you have children, they might be grateful to you for thinking about them, knowing you loved them that much!
My point here is not to sacrifice only to give your children an inheritance. Rather, my hope is that you can develop a persistent habit of saving, as a priority in your budgeting, to be able to save enough to enjoy your retirement and have some left to pass on to family and friends as an inheritance.
Changes to Save
Your present financial condition may make you depressed and unable to see beyond today. Having little to eat will do that for you. However, a change of perspective over time can allow you to make the necessary changes for a better financial future.
Consider these steps:
- Make saving a priority. Start with 10% of take-home pay and live off the rest. Do some short-term sacrificing.
- Work on your skills to improve your income potential.
- Work extra hours or find a part-time job to supplement your pay to reduce debt and make saving easier.
- Reduce debt to increase monthly cash flow and help to increase your percentage of savings.
Set some goals for savings. Work on yourself for better income potential. Be persistent with savings and money management.
Then, it will be easier to have cash on hand. When you have needs, you will be able to be more patient knowing you can pounce on any saving opportunity when it appears. Or, even better, you can fund income producing investments, like buying to make a profit.
That will be the moment that you will recognize you are able to spend to save!