A Simple Savings Plan that Pays Dividends

Financial Physician’s Daily RX

A Simple Savings Plan that Pays Dividends

In researching topic ideas for today’s RX, I ran across a story dating back to 2008 by Boston Globe staff writer, Mary C. Franklin. I was very inspired and thought I would pass this along.

She writes:

“Three years ago, I made a decision that changed my relationship with money: I stopped spending and started saving every five-dollar bill that passed through my hands. Squirreling away each and every $5 received as change from a cash transaction didn’t require any complicated savings strategy, but it has paid off, to the tune of $12,000.”

So how did she save $12,000 in three years?

It was actually very simple. Every time Mary got a five dollar bill back in change, she stashed it away in her wallet until she accumulated $50. She then deposited her five’s in a designated bank account, and once that account reached a balance of $2000, she purchased a CD and the growth continued.

Don’t use cash? No problem. Make it a point to get cash back on your debit card purchases two to three times a week or every other purchase. Squirrel that amount away in a designated deposit account and watch your savings grow.

Discipline obviously plays a strong role in any savings plan or personal goal. In my book,”The Financial Physician: How to Cure Your Money Problems and Boost Your Financial Health,” I write that goal-setting helps us lead more financially responsible lives. Realistically, all your goals won’t be fully achieved, but if you achieve some of them, or better yet most of them, you will be well ahead of the game. You will be saving and investing some, rather than saving and investing nothing, and then trying to scramble when it becomes difficult or too late.

For most people, the world financial crisis has been a wake-up call. In today’s financial landscape, people need to be more frugal, more goal conscious and more financially literate, in order to achieve their goals.

Financial literacy is an ongoing process and evolves with market and economic conditions. Making financial goals and seeing your savings grow, no matter how modest, will become an interest and fascination that you will enjoy, and incorporate as a regular part of your life, which will help improve it.

Learn more about saving and improving your financial health at my website, and learn more about The Financial Physician: How To Cure Your Money Problems and Boost Your Financial Health here.

Article source: http://www.thefinancialphysician.com/blog/?p=7754