Start Saving As Early As Possible

Lesson number: 

Wouldn't it be a novel idea if everyone started saving for retirement as soon as they got some money in their slippery little hands? Perhaps even starting by saving some recess money at school? Now I know that sounds ridiculous. However, just think if we could slowly change our mindset as kids from an all consuming individual, to a thrifty, saving type who desires to be financially prepared for their future. That change in mindset might make everyone feel more secure throughout life, knowing that we always had money in the bank earning compounded interest.

My financial magazines are full of disheartening articles which discuss how little the average baby boomer has saved for their retirement. Our robust economy often appears like a house, built using a deck of playing cards. The picture of consumer's stand out prominently on each face card, symbolizing that we are an all consuming nation, made up of individuals that often spend much more than they earn annually. Saving seems like it's an afterthought, rather than a priority for the average family who's trying to put their kids through college while they juggle the real inflationary costs of living that's not reported in government statistics.

At some point, the only way to save ourselves financially, as well as save the federal, state and local governments from the impending financial ruin they may face from entitlement programs, is for each of us to START SAVING MORE OF THE MONEY that flows through our checking accounts right NOW! While that may seem like a tall order that will require some fiscal sacrifices, there's not much choice in this matter. We all have the capabilities to earn more money by improving our skills and value in the marketplace. However, earning more and spending every penny of it does not solve our impending financial problems.

Going back to my earlier premise, I think we need to teach kids in school, at a very early age, the value of saving. We need economic classes that encourage kids to budget and save their money with positive reward systems in place for the most efficient and diligent savers in the class. Wouldn't it be great for students to get plaques or trophies at the end of the school year for their achievements in the creative art of saving? These skills in economics and saving, along with the trophies for proficiency may prove to be much more valuable in their future than the soccer or baseball trophy sitting on the mantle.

For whatever reason, parents and students of all ages seem to dismiss saving money as a waste of time and monetary resources. Every penny that most kids get for gifts gets spent on non-essentials rather than saved. You just need to peek around the houses of parents with young babies or toddlers. The parents, relatives and friends of these kids seem obsessed with filling the house with toys and junk that has a month's lifespan of interest. Or they buy more clothes and gifts than the kid could ever wear, before they grow out of them. Or receive every latest fad costing 50 or a 100 bucks, that will be obsolete boring in very short order? These early spending patterns usually continue through adulthood.

Now I'm not Mr. Scrooge who wants to deprive a cute kid of nice clothes or a few toys. However, I think the best gifts that all Grandparents, Uncles and Aunts can give to kids are US Savings Bonds. These bonds accumulate tax free and get put away over time and magic 20 years later there's a pile of money that accumulated without anyone ever missing some of that extra junk that laid around the house until it got packed in the garage or shed or was discarded.

If kids learned to save at an early age, guess what might happen to them when they became adults? There isn't any goal in life that is more noble or satisfying than becoming financially independent in your latter years. We know it's possible, because the greatest generation did it before the boomers. Making a lot less money than those born between 1955 and 2000, those who lived through the Great Depression and World War 2, were a generation of savers. Their tough experiences taught them the value of money and they knew how to be thrifty and save a portion of every dollar they earned. They did without lots of unnecessary junk and still spent enough to keep the economy going as well as had a comfortable life. They developed a valuable mindset to save that is missing in today's generations. Somehow we need to figure out how to get some of that mindset back.

However the only way this can happen is to hunker down and face the facts. We should be smart enough not to wait for another Great Depression or similar Financial Disaster, to learn the hard way. We need to discuss this issue with our school administrators and get some kind of grass roots movement going – before it's too late. Like Global Warming, we need to develop the art of thriftiness and saving that the Greatest Generation practiced in the 20th Century. It's common sense that we somehow need to revisit. We all need to start saving as early as possible!