The Money Secret!

"The Root of All Evil" or "The Bloom of Success" - Here is a little story passed down through the generations you may have heard or not ... but as far as the topic of money goes, it's worth repeating.

The "Secret"

A young man in his early years in the work field was depressed as he thought he was unsuccessful in that he had been working for several years and had nothing to show for it. No bank account to speak of and little in his pocket.

He remembered meeting an elderly man during his youth and also remembered how successful the older man was and thought that one day he would like to be like him. The young man especially marveled at the material things the older man had acquired and knew of his financial success.

So, quite despondent at his own failure and desperate to seek advice or additional learning to better himself he sought out the older man and arranged to meet him. He thought that if he could talk to him the older man would reveal his treasured "secret" on how he attained his wealth.

They met in a quiet setting and the younger man told his story of how he had worked for a number of years and though he tried very hard, he found it extremely difficult to save any money after his obligations and had little to show for all the years he worked. He asked the older man if he would share his secret and tell him how he managed to acquire his wealth.

The older man who might have been of any culture and denomination of faith as this is not a matter of importance, chuckled under his breath and it made the young man feel uncomfortable and embarrassed that he thought he had offended the man for asking. But before he could apologize for his abruptness and inquisitiveness, the old man spoke.

"My son, I have no "secret" regarding my wealth."

And the young man replied, "Oh, but you must have. You must have a greater wisdom than others as you are rich and it is well known that you have much money."

"Well, Yes, it is true that I am wealthy", said the old man, "but how I acquired my wealth is no secret. I shall be glad to let you know."

The young man leaned toward him and showed an astute attentiveness eagerly waiting for the old man's next words that would reveal a mystical magical mystery.

Then the old man spoke. "Son, It is really very simple. Every week you perform your duties and receive a wage, right?" The young man nodded in assent. "Well," continued the old man. "And you dole out your wages to pay your rent, the grocer, your doctor bills, your dentist bills, correct?" Again, the young man nodded. "Well, how much do you pay yourself?" the old man asked. The young man suddenly had an astonished look on his face. "Pay myself?" he blurted out. "Yes," said the old man. "Yourself. You worked just as your doctor did and as your dentist did, didn't you? How much did you pay yourself for the week you worked?" The young man didn't know what to say and sat motionless and stunned.

"You see, my son, that is the "secret" you are looking for which is no secret at all. Pay yourself first before you pay any of your other bills. Pay yourself a wage you estimate you are worth for the week you worked and place the amount you pay yourself into savings. Pay your remaining bills from the balance left. In a short time you will see how easy it is to accumulate a fortune."

They shook hands and the young man thanked the older man for his "secret" and more so for his wisdom. The young man went away determined to put into practice what he had just learned from the old man. The old man went away with a smile on his face and a warm thought that he had brightened the life of the young man with his "secret".

The young man returned home that evening more enthused and energetic than he had been in a long time. He began to think about what the old man had said. "Simple, the old man said. More simple though in words rather than in actuality. "Pay yourself first." Sounds logical enough but then what amount should it be? It is true, I worked an entire week and I have nothing to show for it. Could this be the answer. Could this be as simple as it sounds. He tossed it back and forth and back and forth again. Well, it's certainly worth a try. I'll definitely give it a try this pay day." And he did. And so began the young man's climb to fortune. In no time at all he began to see an accumulation of savings and it made him feel good. "He was right, the old man was right and it really was very simple."

Sound easy? And simple? The secret to success? Well, it could very well be if every thing goes well and falls into place. But life doesn't always work that way. Obstacles keep popping up in a lifetime. Unforeseen expenses too. But aside from paying yourself which is a very nice position to be in, there are other quite apparent remedies available.

Also available, however, is the constant bombardment of advertisements consistent and persistently flashing before the consumer coupled with the equally availability of credit to the point of morally illegal. All of which prompts one to evaluate his or her own financial condition and make a most important decision as to the style of life, the priorities in the picture of one's finances and the goals to set for the future.

Life Style

The average family [census always indicates 4 with the absurd ½ individual members] usually is content with an average life style of a home, nice furnishings (renewed periodically), seasonal clothing and a yearly vacation. Most families are conservative and live within their means but in an electronic cyberspace age things are easily uncontrolled and the urge to live beyond means appears to be easier and easier. While it is difficult it is most important to remain within your income boundaries and not become indebted via credit cards and/or equity loans.

Single persons, some with career employment, supplying expense accounts and the life style, of course, have greater financial means but on a personal basis can easily exceed their own financial means attempting to keep up.

So it is important and best to determine how you want to live. That is, dinner and dancing, theatre and shows, cruises and travel, all beyond your means or a more quiet within your budget routine enjoying the best things in life which are free.

The Secret The illustration above of the old man's "secret" is basically very sound. Take the time to make a list of income vs. expenses. That is, the usual amounts expected to be expended monthly. The positive difference between the two would be a basis for the sum weekly deposited as "the wages to yourself."

Realistic Figures

Begin with a simple account of monthly income, single or joint for couple. List all monthly expenses and begin with the deposit illustrated above if the figures permit. If not, it is time to make adjustments. The income figure more than likely will remain the same so it is necessary to cut back or eliminate certain expenses. Don't be discouraged if this cannot be done immediately. It may take time to make the adjustments work into the plan. Some changes can be made immediately while others will take time. For instance, one might eliminate the lawn services at $30 a week and perform this chore oneself. A credit card balance might not be paid at once but additional charges on that card can and should be avoided. A careful review of the list can produce like changes in favor of a larger available monthly income. Some other ways follow.

Ways to Save

Make Use of Coupons/Discounts, etc.

While the internet, magazines and the daily mail are all diluted with ads, flyers and brochures of every kind and nature for coupons, discounts, promotions and super deals and sometimes they become irritably annoying, there is a great deal of saving to be had in perusing them. Supermarkets, fed by food manufacturers constantly compete with one another and it is wise to scan through the leaflets left at your mailbox to shop and compare.

It is not necessary to eat steak and potatoes every night. Ask Granma how she stretched the big pot of pea soup (with the Easter ham bone) and two loaves of oven baked bread between her family of six. Or Mom how she made two pounds of pasta (she got on sale) with sauce feed ten. There are a zillion low cost meals and recipes available and many are more delicious than filet mignon.

Fast food eating becomes a habit and is costly. Many times half the food ordered is left on the table uneaten. Break the habit and try to prepare less expensive but nutritional foods at home.

Department stores push seasonal sales throughout the year as well as appliances as new models with innovative ideas will appear shortly. Don't buy spontaneously. Read the newspapers and scan the internet for the best offers. It is not necessary to have the newest model in the latest color. Save big bucks by buying the clearance model but be sure to get your guarantees, etc.

Cars/Gasoline

The car, be it the family sedan or the mod single convertible, is a great possession. But in today's world, it has become one of the most money-eating necessities. When possible, plan your ride economically. Set down your chores in order of destination that is, line up your stops in an order so that you're not driving back and forth using too much gas. Go one way on one day stopping at all stores in one direction and go the other way on another day when you have accumulated chores in that direction. Don't use precious gas sitting in heavy traffic at lights on a Saturday or Sunday if it's not necessary. Drive on "off hours" on weekdays.

Shop around for car insurance. The insurance companies, like all other businesses, compete for your business. Find the best rates for your needs.

Credit Cards

Check out your cards. Yes, "cards" plural. Most people have more than one and some have as many as they can get. Look at the interest rates not only for the amount you charge, but also for the amount of cash you withdraw. And how about those "late fees". The original credit card was established for the ladies of the wealthy gentry. Today, while it is a most convenient way of shopping, no cash required in the store, it has become a pitfall with some actually addicted. Be sure not to go beyond your means, beyond the ability to pay for the items charged or the cash withdrawn. The only way to manage them is to make a payment above the amount shown due. To pay only the amount shown due means that the interest shown charged will be added to the balance and then you are paying interest on that interest! So, it amounts to "two steps forward and three back." Stay within your buying power. [If you only net $2,000 a month income, it is unrealistic to imagine that you can pay out $2,500.] If you find yourself being overwhelmed and out of control buying on credit, do not hesitate to cut up the card(s) and make every effort to pay down the balance(s). You'll find you will not only feel better for having no debt but you'll also sleep better at night.

Clothing-Apparel

Designer jeans - unheard of in the '40s. Little LuLu wore her older sister's dress when her older sister grew out of it and Brother Bobby wore his older brother's shirts and sweaters even with elbows darned. These clothes were washed and starched until the flowers and stripes were almost worn out of them but they weren't charged on any credit card and Momma an' Poppa didn't owe anyone anything for them. [An' more important, the kids never knew the difference!] The difference was the family lived within its means. Economical, yes, because of necessity and because of pride.

Likewise, it is impossible to keep up with the ever-changing appurtenances related to computers and cell phones and the cyberspace age. Keeping up because of a status situation can be severely damaging to the earning capacity of a family. The expectations of any member must be curtailed graciously with understanding in order to maintain financial stability. It is only natural to want to give as much as possible but it must be within reason.

Health/Cosmetics

"Hazardous to your health" appears on cigarette (and other tobacco products) today. The packaging might also add, "Hazardous to your pocketbook as well." Cut back on smoking to aid your health. Cut back also to aid your savings.

Have you checked out your toiletries lately? A quick look will produce a waste basket full in no time. A further review will provide a list of what NOT to buy as it is a waste. An immediate reduction can be made of the purchase of numerous bottles of aspirin, tubes of cream and all sorts of liniments and body curing remedies at enormous savings can be made. Purchase only what you need when you need it and then, compare shopping again.

CHANGE IS DIFFICULT

Most people fall into a habit or pattern both of which are very difficult to break or change. But today, with the constant pressure of rising prices but no rise in income, it is imperative to take heed and learn how to manage your finances. The burden of debt is a heavy one and not easily discarded. Above all, don't be embarrassed or feel uneasy to acknowledge that you cannot participate in certain costly events. An overhaul is urgently needed if you are in or nearing a financial crisis. Cautiously use judgment to avoid more embarrassing debt collections by taking steps to save money in whatever manner possible.

Once a new pattern is established with care and consideration it will become as easy to follow as the old one but definitely more advantageous to you. The little time and effort taken will prove to be a huge saving in many more ways than one.

Cowbella's Cue: The little cents you save here an' there now ... will add up to be a big dollar difference later. Once you're underway an' you can see savings accumulate you can begin to think of the future and how it will help when you reach the age of retirement, the "Golden Years".