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Personal Finance - A Novel Way To Save
Is Saving "Uncool"?
Unlike previous generations, saving money now seems out of fashion. The days of painstakingly saving your pennies for that future special purchase seem long gone. Lily Allen summed up Gen Y in her 2009 hit 'The Fear' :
"I am a weapon of massive consumption - It's not my fault, it's how
I'm programmed to function"
Saving money is seen as wasting it. What is the point of having all that money sitting around doing nothing? Easy credit meant that just about everyone could have the life they saw on television. Instant gratification is the catch phrase of the youth of today.
The Uncomfotable Reality
Most people learn about the realities of money the hard way. They live that clarifying and frightening moment when the debt they have accumulated finally hits home. The Global Financial Crisis has put the brakes on this type of lifestyle for some, others continue forward oblivious to the reckoning awaiting them.
Easy credit made living beyond your means not just a possibility but the norm. Banks were practically throwing money at people in the first half of the decade and it was not uncommon for people to boast about the level of debt they had managed to achieve.
Savings You Don't Notice
I first heard about "Golden Boys" through the Australian Expat community in London. It was here that a novel form of saving became very popular. It's popularity spread at an exponential rate, or as they say these days, it went viral. The reason it was so successful was that it was simple, easily started, and most importantly, did not seem to affect the party lifestyle that was so important at that time and place.
It also started to develop it's own rules and alter the behaviour of those involved. It appealed to the competitive nature of those participating and people often asked for your running total.This simple, behavioural savings plan has been responsible for bailing out many a traveller when their bank balance hit zero, they were burgled, or they returned from a trip in need of a rental deposit. For many people it was their first experience of having a financial 'safety net' - and they can be handy things indeed.
The origins of the 'Golden Boy' savings plan remain a mystery to me. The concept is so lacking in complexity that multiple people probably started it simultaneously. It's success I think lies in the value of the chosen unit.
The Savings Plan is as follows:
Rule #1: Every time you receive a £2 coin as change, do not spend it.
Put it in a jar.
Here's why it worked:
£2 are common but infrequent. You may get two in a day or none for a week.It is an amount of money worth saving but not so large as to notice it's removal from your cashflow.It is compact so that when a jar is eventually counted, the saver is amazed at the value already amassed and encouraged to save even more.
Behaviours Caused By The Golden Boy Obsession
Even people previously labelled as financially irresponsible got caught up in the Golden Boy psychology. People would intentionally feed a £20 note into a subway ticket vending machine for a £1.20 fare as they knew these machines were "a good source of Golden Boys". At any group dinner, when the bill was being sorted out, any £2 coin that hit the table was quickly snatched and replaced with two £1 coins.Enthusiasts were always on the lookout for their next score.
Devotees took it to the next level collecting £1 coins or "Single Boys" as they quickly became known.
The record? Given the short period of time many people were in London for there were some impressive totals. I'm not sure it was a record but a friend of mine ended up with over £1300 (at the time over $2500 USD) and paid for a 5 week holiday in Sri Lanka for him and his now wife. I never made it that far but I was never caught short again for money and my little jar of gold coins saved me on numerous occasions when the cupboard was bare.
This simple version of a Piggybank somehow appeals to adults and for all I know, there is probably another generation of antipodeans crammed into London flats each with a little jar of coins.
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