Of all of the financial advice I have read, one piece stands out as the most meaningful. It’s a one word goal that is deceptive in its simplicity and it changed my life.
For me, starting to save was one of my greatest achievements of the past decade. The first time I posted a surplus was an incredibly liberating feeling. Suddenly credit card companies, bill collectors and collection agencies had no reason to call. It was as though a constant (albeit politically incorrect) game of cowboys and Indians had suddenly ended, the chase was called off and I was free to go my own way.
Similar to exercise routines, or remembering to call grandma every week, the toughest thing about the whole procedure was the first time. It required change and people, including myself, are loathe to make change.
What surprised me- and despite what I had thought, the act of saving soon became enjoyable in its own right. It’s not the immediate joy I get when the alarm accidentally goes off during the weekend or leftover pizza appears in the fridge after a night at the pub. Instead, it’s a plodding, long term deal. It’s more the feeling I get after a good workout or when I happily noticed that 2% milk suddenly tasted like a viscous goo after switching to 1%. These are good things, that will make me a better person in the long run.
The sad thing is that, in our quest for immediate gratification these pleasures are too easy to overlook. This is why only 24% of eligible Canadians file an RRSP and we only currently stash away a pathetic 3.9% of our incomes.
Experts often recommend that money be automatically withdrawn from our paycheques to savings, a sort of trickery that forces us to contribute once a month. And that does work. But in my humble opinion it also robs us of our greatest weapon to really invest in investing.
My technique is to very consciously and methodically decide how much goes in my account each month. This is because I actually get off seeing my bank account swell and look forward to helping it along. I don’t have a specific amount I plan to stash away each month because my strategy is to live as frugally as possible and dump the rest into index funds and ETF’s.
But I’m getting ahead of myself here. Before you begin to save, you are taxi driver with no petrol or a hockey player living in the deep Congo.
It all starts with a very small, though not necessarily intuitive step. This is, to use an old cliche, to put a few cookies from the jar just out of reach. To portion even a minuscule amount of your paycheque away from the incredible diversions of modern society towards your greater good.
In short, to begin, you must first follow my best advice. You must start.