The Discipline of Saving and Investing: Paying Yourself First.
Learning to save and invest is not just about setting aside money—it’s about paying yourself first. It’s about ensuring that you’re prioritizing your future self and setting up a strong financial foundation for tomorrow.
My friend Stewart taught his teenage daughter the power of saving when she started her first job. He encouraged her to save 40 cents of every dollar she earned. She took this discipline with her through high school, college, and into her adult life. As a result, she is now the proud owner of two condos, thanks to her consistent saving and investing. This lesson, if shared widely, can create a ripple effect of prosperity. Learn to save for your future car, house, condo, or other essential needs—and share this mindset with your family and friends.
My Journey: A Lesson from Momma
I began my journey of saving when I was just 8 years old. My Momma, Romayne Leader Frank, asked me to bring the $2.25 I had saved from doing chores. “We’re going on a new adventure today,” she said, smiling. We drove to a beautiful brick building—the bank near our home. She introduced me to Mrs. Teller, who helped me open my first savings account.
I’ll never forget the way Mrs. Teller explained compound interest to me: “Compound interest is the interest you earn on interest.” At the time, I didn’t fully understand it, but I could see the magic in action. Every few months, Momma would take me to the bank to deposit the new money I’d earned, and Mrs. Teller would add the interest to my passbook, along with the compounded interest from the previous deposits. Watching my money grow over time became a thrill for me.
The Magic of Compound Interest
As I grew older, I learned more about how compound interest could work for me. The longer you leave your money invested, the more it can grow exponentially. The interest earned on your initial investment gets reinvested, so you earn interest on a larger and larger sum over time. This is why starting early is so powerful.
Let’s take a simple example: If you invest $100 and earn 5% interest annually, in one year, you would earn $5. But, the next year, you will earn 5% interest on $105 (your original $100 plus the $5 interest). The following year, you’ll earn interest on $110.25, and so on. This snowball effect can lead to wealth over time, especially if you start early and let your money grow.
Simple Savings Plans: A Foundation for Success
Before diving into more complex investments, it’s important to have a solid foundation of simple savings. Saving consistently and building an emergency fund will allow you to weather unexpected financial challenges and invest with confidence.
The Key to Simple Savings Plans:
1. Consistency is Key: It doesn’t matter how small your contributions are; the key is consistency. Set up a savings account with interest and begin to save your money to make saving a habit.
2. Emergency Fund First: Before diving into stocks or bonds, prioritize building an emergency fund that covers three to six months of living expenses. This gives you peace of mind knowing that you’re covered in case of a job loss or emergency.
3. High-Yield Savings Accounts: If you’re keeping money in savings but don’t want to take on investment risks, consider putting your money in a high-yield savings account. These accounts offer better interest rates than traditional savings accounts, allowing your money to grow while remaining safe.
4. Budgeting and Expense Management: My Momma taught me the importance of keeping a ledger, budgeting my expenses, and paying myself first. It’s important to track your income and expenses so that you can consistently contribute to your savings.
Start Today for Prosperity Tomorrow:
As my story shows, the habit of saving and investing can set you on a path to financial prosperity. By starting early and consistently saving, you’ll see the compound interest work in your favor.
As you begin your own journey, remember that small, consistent actions can lead to long-term success. So, start saving your pennies today, and watch as they turn into your financial prosperity tomorrow. © 2025, 2024, 2019
Madeline Frank, Ph.D., DTM is an Amazon.com Best Selling Author, speaker, business owner, teacher, John Maxwell Team Member, conductor, and concert artist. She helps businesses and organizations “Tune Up their Business”. Her observations show you the blue prints necessary to improve and keep your business successful. Her latest book “Leadership On A Shoestring Budget” is available everywhere books are sold. If you need a speaker or video speaker contact Madeline at: mfrankviola@gmail.com
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