COLUMN: Start saving, now
There were three years in my life when I wasn’t saving a dime. Those were the last three. I hated not putting something away for a rainy day, but I couldn’t. I was making less than $500 a month at my minimum wage job and going to school full-time. I was paying for tuition, books, fees, rent and food all on my own. There wasn’t a penny left at the end of the month to put into a savings account – and if there was, I bought ice cream.
All my life I’ve been a saver. It started when my parents put $500 into a mutual fund a few days after I was born. It has grown to about $2,000 – not a bad return of 6.5 percent. My parents also started a little savings account for me and I put some money in it when I had it. Once I got a job – working on the family farm – it started to grow. I still have every cent of that money. It is now in my ‘Buy a House Fund.’
There was a reason why I didn’t spend my savings. It wasn’t there for spending. I treated it like it was untouchable. It was my back up in case of an emergency.
I have decided the reason I have always been financially “secure” (I’m using the term loosely) is because I have never spent money I didn’t have. Luckily, my husband is the same way.
I don’t spend on credit and I don’t spend the money in my savings account. Now there are obvious exceptions to that. You have to borrow money to buy a house, and usually a car and sometimes for an education. These are all perfectly acceptable.
It’s important to save as much money as possible so that one day you can put a down payment on a house or make small purchases without taking out a loan. Here are some tips to start saving.
l My cousin, Cami, gave me the first idea. Her dad would come home and empty the change from his pockets onto the floor. Cami would then go behind him and pick all of it up. Eventually she had a good chunk of money. So, get a jar, empty your change into it every night and watch it grow. (They even have change counting machines in most grocery stores now, so you can save yourself the trouble of counting it when you want to deposit it into your savings account.)
l For those more serious about saving money, there is always the 10 percent plan (or as much as you can afford). Decide on a percent of your income that you want to put into savings and do it. The best way is to find out if your employer has direct deposit and if they will automatically split your paycheck into two different accounts.
At USU, you can put a certain percentage into one account and the rest into your main checking account. You never see the money so you don’t know you are missing it. Maybe put it in an entirely different bank than your checking account. Then you won’t be tempted to spend it.
l I got married eight months ago. We found out we could live on what my husband makes, so every bit of my check goes into a Money Market savings account. We also put in random money we get, like when someone pays us back for something. College is a time to be poor, so if saving your money is making you poor, just think of the benefits in the future.
l This brings me to my Money Market savings account. Find one. Or if you can leave your money there longer, find a mutual fund. The .05 percent interest your normal savings account is paying you is worthless. You might as well have a wad of cash under your mattress. My account is at Zions Bank and it pays 5.3 percent interest – which can really add up (about $150 a year if you have $3,000). Essentially you are getting paid for nothing, and that feels good. It is all on the Internet and I can make transfers as much as I want. Banks also have CDs (Certificate of Deposit), which have high interest rates, but you have to keep it in there for a set amount of time.
Remember to start out small. Make saving a habit and it will come easier as time goes on. Also remember that you are paying yourself, not losing the money. It’s a good thing and it will benefit you more and more in the future, especially if you start saving early and start earning interest.
Holly Mitchell is a senior majoring in print journalism. Comments and questions can be sent to hollyadams@cc.usu.edu.