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Monday, September 19, 2011

Does this remind you of yourself?

You save up a bunch of money, and then when something great comes along, you start spending all your savings. Yes?

Your not alone

In fact, many end up spending most if not all of their childhood savings between the ages of 18 and 22.

I am guilty. It's okay though... as long as you have a backup plan.

For instance, I am travelling at the moment... well studying and travelling. I am studying at Lincoln University in Canterbury, New Zealand. If I stay on campus, I barely spend any money... but as soon as I get off campus and start sightseeing, my money starts to disappear.

Before coming to New Zealand, I allocated a bank account which would (hopefully) be enough to last me the four months that I was studying for in New Zealand. No, I am not rich... I have just been organizing my money into different categories for many years. I'm twenty years old... I don't have a ton of money, but if you start early, it's amazing how much money you can save... especially if you save for a GOAL. When you save with a goal in mind, you end up focusing more on saving (in order to achieve that goal) rather than just to see numbers rise in an account that says savings account... instead, I recommend having the bank label it based on the goal you have.

I also recommend opening up bank accounts with different banks. So when you are saving for your travel budget, you go to TD Ameritrade. When you are saving for Retirement (start now!) you go to Chase. When you are saving for a car, go to Wells Fargo. This way, you have an image in your mind of which bank is for which purpose. At your age, you may want to constantly go to Wells Fargo when you gather a few extra bucks. Once in a while you may visit TD Ameritrade because it's fun to travel. But rarely, or even never will you visit Chase. Visit Chase... ask an adult!

The one's that tell you to not worry about it most likely do not have enough money to retire... and therefore, it is up to you whether you want to listen or not. But wouldn't it be great to start early, and retire early... as early as 35-40 even! I've seen it happen... these people didn't make a million dollars a year, they just started saving early... seriously. Knowing that you don't need to work would be the best feeling in the world... even better if you continued working because you can finally enjoy what you do, and not have to worry about paying the bills... bills are so stressfull! Stress kills, therefore avoid all of that by 
S  T  A  R  T  I  N  G    N  O  W. 

Your backup plan requires that you visit TD Ameritrade, Wells Fargo and Chase evenly. If you keep them close to equal... then when it comes time to travel, and if you don't have enough in that account, you can evenly distribute withdrawals from Wells Fargo and Chase (depends). If you have it all in one, you are more likely to spend it all. If you have multiple accounts, it will 'feel bad' to go broke in all your accounts, so it will force you to spend wisely... trust me, this 'secret' works!

Plus, when you return from your travels, like myself, you will come home to two accounts which have some dough in them ($10 in the Wells Fargo and $20 in the Chase. Seriously, try this out, it really works! Remember, I'm not getting paid for this... I'm doing this on my own time to help YOU out.)

MB

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