If you decide that you want to start saving money, BEWARE! Saving money can be extremely dangerous. The reason: if you start saving money, you might start having money. And when you start having money, you might start spending money. If you only save money to buy nice things, then you’ll likely need more money for more nice things. It’s a vicious cycle! And it’s a reason why many don’t really have any savings. Here’s a secret: if you want to save a lot of money, pay off your mortgage early.
I know a guy whose kids kid him that he’s the only person they know who has lost a thousand pounds. Every time you talk to him, he says that he’s found another great secret to losing weight, and he’s just lost 10 pounds. But he always looks the same.
Saving money can be the same thing. A lot of people think that they are pinching pennies and saving a ton of money, but when it comes down to it, they’re always pinching for pennies, and they don’t seem to have money.
If you save money, you will have money (which is tempting to spend!) If you save money AND invest money, you’ll have a lot more money (which is a lot of fun to spend!). If you really want to save money, then you need to put it somewhere safe, and hopefully somewhere that compound interest will multiply your savings. What safer place to put it than in your home? When you’re paying off your mortgage, every dollar counts. Think about it: A dollar saved is Five dollars earned, because you are putting compound interest to work for you.
Saving = Good
Saving + Investing = Great
Saving is good. But sometimes people ask: Which is better, saving or paying off your mortgage? Well, paying off your mortgage is saving. As a matter of fact, it’s saving on steroids!
[…] Let’s assume you save $5 on lunch for a month. $5 * 30 days = $150.00 saved in a month. Way to go! You’ve got an extra $150. $150 * 12 = $1,800 per year. But don’t just stop there. (Read this blog post on the dangers of saving money.) […]