In first grade, I used the “squirrel away” method of saving money. I don’t remember how I acquired the dimes, nickels, and quarters I had but I do remember storing them in little hiding places all around the house. As the holidays approached one year, I fell in love with a stuffed bear at the local drug store. Oh, how I wanted that bear. It was small and furry and just needed to come home with me.
I dragged my mom to see it in the store and told her how much I wanted it. Her answer to requests like this was to tell me to save my money. When I got home, I ran to all the hiding places and counted up what I had. The bear cost about $12. My stash of coins added up to about $8. I spent the next few weeks trying to earn more money so I could buy my bear. Every time we went to the store, I checked on my bear and schemed of ways to earn enough money to buy it. I got very close. I was so focused on reaching the $12 mark and I believed my mom about saving my money that I didn’t suspect it would be given to me for the holidays. It was a great surprise when my stocking that year held my cute little bear.
Since then I’ve moved on from the “squirrel away” banking system and my savings goals have changed but some principles from that early experience have held true.
The Bear’s Legacy: Following a System
In first grade, I had one goal and every penny I earned went toward it:
100% savings for Bear
Now I have many goals but I can use the same system I started earlier. Every time I earn money, a certain amount of it goes toward each goal. For instance:
60% to living expenses
15% to retirement savings
10% to fun experiences/vacation savings
8% to education savings
7% to charity
This is just an example and every person or family will have its own formula. But the principle holds true. Figure out what formula works for you and then each time you get a paycheck, you’ll know where the money goes and you’ll feel good that you’re progressing toward your goals. This takes the guessing out of your financial management and gives you control.
I still have the bear. Most of the other stuffed animals found their way to new homes but that bear held a special place in my heart. And now it inspires me to keep saving for other goals that are important to me (if not as soft and furry).