Money Pillar #3 - Save

Building on the previous Money Pillars – Income and Spending, now we come to something a bit more “fun” – saving!  I realise this isn’t what you probably think of when you want to have some fun, however, from a money perspective, seeing your money grow and build will give you more options.  Once you have more options, you can have more choices to have fun!

See where this is going?  It’s all about lifestyle – on YOUR terms. You may as well live the life YOU choose, and not someone else’s version.

Saving can be very rewarding, and there are different ways in which to save.  It’s important to understand how you best save, as this can be a life changing realisation.

I’ve always been a saver.  Ever since I was a little kid I always squirreled away at least some of my pocket money.  I began working at 15 as a Figure Skating coach, and I saved 70% of what I earned.  Living at home still, it was easy to do, as I didn’t have too many expenses.

As I got older, and moved out of home, the savings amount went down to about 30%-40% of what I earned.

The way I save is to have my income go into an “everyday” account, and then to immediately send different proportions to high interest bank accounts.  Here are the accounts I have:

1.    Investing money (I save up and then invest in something I’ve been researching)
2.    Play money (for me I spend this on travel and photography)
3.    Utilities money (I put money aside each month for quarterly or annual bills, so that when the bill comes, I have the money to pay it)
4.    Retirement money (because I like to have a little extra above and beyond superannuation, that’s available when I want it)

My father has always been trying to push me into investing in property (which I kept resisting), and it was only a few years ago when we had a proper discussion as to why.  He told me that he was terrible at saving, so for him, buying a property and being “forced” to pay a mortgage was his way of saving.

For me this was a lightbulb moment.  I had never thought about it like that.  I never needed to have a mortgage to save, and I much preferred having investments that were more liquid, and that didn’t take up such a big chunk of my own capital.  That said, if you find the “worse house in the best street”, and you can add value to that property, then it’s definitely worth considering.  Ultimately, a house or apartment is somewhere to live, and although it’s your home, it’s still an investment.

So, it’s important to understand what kind of saver you are.  It will change how you look at saving, and rather than being a depressing chore, it will become fun watching your balances grow!