- Personal Finance»
- Understanding Finance
Money doesn't grow on trees... unless you plant your own
Change your habits and pick it up!
It is said, according to a Chinese Myth, the owner of a Money tree will have good luck and fortune brought upon them. The problem is, getting your hands on a money tree might be a difficult task. Therefore, if you want to be a proud owner of a money tree, you must take responsibility into your own hands and plant your own.
With a money tree, you will have a surplus of wealth. Yet, nurturing this money tree to prosper and grow will be a impossible without creating a strong root system. You will have to work hard and do your research. This tree is touchy and needs to be cared for well.
The Money Tree...
Saving should start young...
The best time to start growing this tree is at a young age, so the fruits of your labor will be seen well into your adult life. As a child, this is done by planting away your money. Obviously a child does not have the financial understanding available to want to save their money, therefore it is up to the parents to teach the child the importance of putting money aside. This money will start off small, but will grow as the child gets older. This money may come in forms of gifts, lost coins found on the street, the tooth fairy, or that dollar Grandpa just gave them for behaving well. Another great form of teaching children the value of money is through an allowance. An allowance is beneficial because not only will they learn about money, but they will also learn they must work for it.
While the saving habit should be instilled at a young age, it is never too late to get into the habit. As a good rule of thumb, a person should always pay themselves first. Therefore, when you get paid for your job, set aside a certain amount that goes directly into a savings account. Make sure to only use this account if an emergency comes up… and needing a new pair of jeans is not considered an emergency situation! This amount of money may vary depending on the person, family or situation. If you have money wasted regularly, try setting your savings goal a little higher per month. If you are a person who lives month to month, try putting aside only $5 per month. Every little bit helps.
Get an education...
In the old days, an education wasn’t always deemed necessary. People were still able to obtain jobs and make a good living to support their family. Now a days, an education seems vital in order to support yourself and maintain a good job. Most higher paid jobs require a degree. Even if you are able to get a decent job without a degree, chances are high your pay scale will top off at a lower level. This can be discouraging. Therefore, continue your schooling and give yourself the best possible chance to advance in your career.
If you are beyond the age where you think you can go back to school, you are wrong. With the recent recession, more and more of the older generations are finding themselves back hitting the books. This is due to a large amount of layoffs and a low job satisfaction. If you find yourself part of this group, remember it isn’t too late. If you are out of a job, this is a great opportunity to find a new career. If you are currently working, try taking a few classes here and there. It is never too late to get your degree and when you final graduate, you will be proud of your accomplishments (and possibly your raise!)
Own a money tree!
Learn the value of a dollar...
Learning the value of a dollar can be tricky, and there are too many people out there that don’t understand the concept. Now, unfortunately, a person’s living situation can’t be defined by whether they know the value of a dollar. For instance, a family who lives month to month may have come across hard times. On the other hand, there might be another family that owns several cars, a house with a pool, and spends money like it is going out of style. Maybe they inherited the money; maybe they won the lottery. Just because they have a dollar doesn’t mean they understand the value of the dollar.
Truly understanding the value of the dollar comes down to knowing what you can and can’t spend. It is also knowing whether or not spending that dollar is worth what you will get in return. A good example of the value of a dollar can easily relate to food. For about $5, you can go to a fast food restaurant and get one meal. For that same $5 you can get a jar of peanut butter, a jar of jelly and a loaf of bread. This can result in a whole family eating peanut butter and jelly sandwiches. You will also have leftover peanut butter and jelly. Now obviously, eating the peanut butter and jelly seems like the better bargain.
Now I am not suggesting that you can never spend your money on anything fun. What I am suggesting is that you are aware of what you get in return for your dollar. So the next time you are in the store, ask yourself if what you are getting is worth that dollar. After all, a couple dollars saved can add up, which means you might end up having more fun spending it on vacation than those impulse buys you really didn’t need.
Setting the roots...
To be the proud owner of a money tree, you need to set up some strong roots. These roots have to be strong enough to hold the tree up against the storms of life. The times when it might be necessary to move across country; the times when you may have to change jobs; the times when a person in your family might become sick; the times when your car decides not to start anymore; the times when you find yourself taking a cold shower because the water heater decided to run out. This are all life storms that can happen unrepentantly. They can also break us if we are not prepared.
But once you have yourself set up, allowing the tree to continue to grow should be a relatively painless process. You have set your foundation and you are ready to expand on the basics. You have learned the value of a dollar and how important it is to save and hopefully you have secured yourself a good job that you will be able to advance in.
So, now that your money tree is planted, it is time for you to water it and watch it grow!
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