Small stuff, big stuff, long term stuff?
It’s a question that all have pondered who ever put a few dollars aside. What am I saving for? What are these savings for?
Easy Simple
It seems so simple, just put some money aside for the hypothetical “future.” Future of what?
When I was younger, I used to hear something I rarely hear these days: Save For a Rainy Day. This is hardly motivating.
What is motivating is saving to be able to invest, and investing to grow one’s wealth. That, in my view, is motivating.
Me, Myself, and I
Over the years, I have saved some. I don’t call it an emergency fund, because I use this saved money for all sorts of things. If I need to buy airplane tickets, I use my saved funds to pay the bill. When I need car repairs, it comes from savings. If my home needs some repairs, my saved funds cover it.
My aim is to live below my means, which by definition means that I expect to run a surplus each month. Namely, I aim to have more income than outgo. And this difference increases my savings, should I meet my goal.
Now the truth be told, there are some months that I spend more than my income. If I have an unexpectedly large set of bills, then I may need to spend more than my income. The month that real estate taxes are due is a month that my expenses exceed my income. Months that I pay quarterly estimated taxes are other times when my expenses seem to exceed my income. But over all and on average, my income exceeds my expenses. Therefore, theoretically, my savings should not go down. That is in theory.
School Thinking
There seem to be two schools of thought when getting into the savings habit. When deciding why one saves, one school says to aim high, because these are the only things that really motivates a person to do big and important things. The other perspective says to start small because small goals are achievable, and one can easily get discouraged taking on large goals that cannot be accomplished quickly.
I can’t say which is better for you. Only you can know. My perspective is to save so I can pay my bills, then save to be able to invest.
Why and What For
So, in my view, it is as important to know Why one is saving as much as What For. My attitude is Less Now, More Later. That is my intention anyway. I cannot tell what the future holds. Perhaps there will be less later. Who knows? But by preparing now, there is better than an even chance that later will be better.
Why and What For do you save? Comment here.
The photo of a loquat tree harvest was taken in 2018. “The loquat (Eriobotrya japonica) is a species of flowering plant in the family Rosaceae, a native to the cooler hill regions of south-central China…. It is a large evergreen shrub or tree, grown commercially for its yellow fruit, and also cultivated as an ornamental plant…. It is also known as Japanese plum and Chinese plum. It is also known as pipa in China, and nespola in Italy.”–Wikipedia.
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