Friday, August 22, 1997
"Ten Percent Savings,
Guaranteed!"
by
[email protected]
I often run into friends who like to discuss money. I don't. It's worse than talking about garden tools. I'd just as soon you bury me in a compost pile with a Smith & Hawkin pitchfork than to talk about money. I do, however, see the value in having money. Lots of it. I'm not entirely stupid. So I'm going to share with you how a not-entirely-stupid individual hangs on to a bit of his money.
When my friends talk about money they're often frustrated. It comes. It goes. But there never seems to be enough. I tell them to turn it all over to me and I'll guarantee them a ten percent savings. Of course they look at me and think, "I'm not going to pay you to do something I can do, even though I don't know what that is." Well, I wouldn't take their money anyway. In fact, I'll reveal this phenomenally intricate system to you, and I won't take your money either.
Got a pencil? This is advanced mathematics. First, figure out your necessary expenses; food, rent, utilities, and things for which you'll get punished if you do not pay, like that regular monthly traffic ticket for running orange lights. Then subtract those expenses from your paycheck. Look down. That big pile of money left in your lap is gravy. You can spend it on anything you want. Unfortunately, that's what we usually do. All of it. A new car? Vacation in the Virgin Islands? Really nice bottle of wine? Gravy. And unless you want to end up as fat as Elvis when he died, we don't need all that gravy.
So, with all that gravy in your lap you're wondering what to do now. Get a napkin? No, keep pencil in hand and subtract ten percent of your gross income from the gravy. Put that ten percent into savings and then go out and spend the rest like a drunk sailor! You deserve it. You've done math.
I know it's tough to balance your standard of living with your level of savings. New car now or financial independence later? Tough choice. Choose financial independence and you'll be rolling in gravy. Ten percent. Guaranteed. Compounded.
I'm sorry if this seems a bit obvious. It's simply living within your means, less ten percent for savings. All of us, regardless of our income, can live off a little less. When you were in college or when you got your first job things were pretty slim, weren't they? But you still managed to have a good time. Now, presumably, you're making a little more money, driving a better car, taking vacations, and drinking fine wine and you think these are a fixed part of your life. They're not. They're gravy. It's amazing how fast gravy becomes a part of our daily diet. One day, you won't remember all that gravy you sopped up but you'll still be hungry. And you'll look into your bank account and see Old Mother Hubbard knocking around in your empty cupboard. Let's hope, come retirement, she's got more to give you than the bone. Good luck.