I recently attended The Power Conference. Got me thinking about the word “power”. What is power? And when it comes to finances, what is “financial power”?
Walking Dogs
There is a cute dog that was recently adopted into a family down the street. The dog needed to be walked over the summer so my kids volunteered and started earning some money. As the money came in, my “Mom-meter” turned on and I told them not to just spend it on the first candy bar that came their way. Then I took a step back and decided this was a good time to start showing them how to use money as a tool – a “power tool”.
We set up the buckets you hear about – Spending, Savings, and Giving Away. Being the age of technology, we put it in a spreadsheet and decided on percentages they wanted for each bucket. As the summer wore on, they saw their buckets grow and become nice little banks. Only, these banks are better than the ones that give out lollipops or even than the Bank of Mom and Dad. They can draw money out without having to ask. There is power in not having to ask.
Financial Power Machines
That works for all of us. No one wants to ask for money. There are times when we may have to, like when we want to buy a home or we’re starting a business or financing our education. But we like the idea of not having to ask. We don’t think about it this way but I’m sure more people would contribute to their retirement plan at work if we called it a Financial Power Machine instead of a 401(k). In retirement, we all want the power to live our lives comfortably with the ability to choose how and where we live. Who doesn’t want that at any stage in life?
Not at Your Local Hardware Store
I’m sure the Home Depot guy would be more than perplexed if I walked in and asked where the Financial Power Machines are (something to keep in mind for April 1st). The great thing is that we all have access to our own machines. There are special tools like a 401(k) or an IRA but you don’t need any of the fancy stuff to build your own. A savings or investment account will do. The key is to set money aside every time it comes in. It’s been said before but it bears repeating again: Pay Yourself First. Pretty simple. And do it often. Your machine will be up and running.
NOTE: If you have Financial Power Machine stories you’d like to share, please get in touch. It will be like swapping power tools for a day.
Kristin Rodriguez