By Seth D. Willard
Some people are wealthy. Others are extremely poor. And then there are the many classes of middle-class people, ranging from well-to-do to in debt. This can be further broken down because many people who are not well-to-do do not necessarily owe money. And some people living in expensive homes and driving trendy cars have paid for their luxuries with someone else’s cash.
Today, borrowing money is a widely accepted source of income, despite God’s warnings about going into debt. While many folks argue that it’s their only option, others have found ways to manage their money so that borrowing isn’t necessary.
Making wise financial decisions can be difficult, especially for someone not familiar with terms such as IRA, compounding interest, trust fund, and money market account. But that doesn’t mean that someone like you or I can’t create a budget and plan our spending, saving, and investing habits. Becoming dollar-wise is something I’m still trying to do, but it has been easier than I expected.
Make the bucks move
Birthday money from Grandpa had been accumulating, and by the time I was done celebrating my fourteenth birthday, I had a bulging envelope full of crisp bills, not to mention payment for chores and working for Dad. At this age, I finally realized that money in the cupboard doesn’t do me any good, but if I give it to the bank, they’ll keep track of how much I deposit in the savings account and add a little more as payment for letting them use it. This didn’t seem like a bad idea, as long as I could get the money back when I needed to buy something. Smiling sweetly, the teller, Mrs. Hauer, assured me that my precious money would be waiting safely until I wanted it again.
Because I rarely needed to withdraw money for a purchase (for the blissful reason that my parents shall supply all my needs according to their riches and kindness), my savings account saw little action except for periodical deposits and interest payments. Thus, I loved opening the quarterly statements and balancing the register with Mom’s accounting calculator. There was never anything to report save gain!
Check it out
Then I reached the age that I needed money for books, music, clothes and to spend on groceries for Mom and gas for the car. Cash wouldn’t do anymore since it’s hard to carry around enough to fill up the tank. So I went to the bank and asked Mrs. Hauer to create a checking account and move some of my money into it. Smiling ever so sweetly, she warned me that I would not receive interest on the money in the new account. But I said that was fine since I was leaving most of my money in the savings account and only moving $200 to checking. A few weeks later, my free checks arrived in the mail, and it was in this way that I obtained a checkbook and was able to make purchases easier than ever.
iCard
Admittedly, I grew up a tightwad: cutting coupons, wearing hand-me-downs, and throwing light switches in unoccupied rooms (though of course, the last is just common-sense, environmentally as well as economically). But don’t think our family couldn’t afford food and clothes. Penny-pinching is simply my instinct, and saving money comes naturally to me.
One of the reasons my parents aren’t as poor as they could be is because they’re debt free. They reminded me of this when I got a credit card last year. By paying off the full balance every month, many cardholders become miracle workers. Their credit rating remains good, they get discounts on insurance, and they earn fabulous benefits and rewards. It’s important to me that I pay my bill every month as well, and not to splurge on things I can’t afford.
Asking Dad and Edward Jones
Currently, my savings money is sitting in the same low-interest account I opened years ago. I know that it isn’t producing to its full potential, and this is a fact that I dislike. Unfortunately, I know next to nothing about the other options, such as certificates of deposit (CDs) and investing in stocks. I want to put my money someplace where it will provide more income, so lately Dad has been teaching me about making smart financial decisions. I’m looking forward to becoming not only penny wise but wise with every dollar God has given me.
Lessons l’arned
At this point I’ve learned the basics of saving and spending. I know that it makes sense to buy only what I need at the cheapest price I can find. Any money remaining (which should be most of it) ought to be placed in an interest bearing account. Additionally, other options are available for higher interest accounts and personal investing.
Most importantly, I realize that debt is an easy trap to fall into. Even so, with a little precaution and a lot of awareness, it’s not unavoidable. By keeping track of where all the money goes and not getting carried away on purchases, common citizens like you and I can start our own collections of crisp Benjamin babies.
This article originally appeared in Volume 1, Issue 23 of Regenerated magazine.
