Congratulations! You’re a millionaire! Not only can you buy your friends swanky gifts and stock up on your favorite Chippy-Dippy Chipper Pops, but you have cash to pay for toys, sports, music, magazines, and clothes galore. Life is sweet.
Well, all except for the fact that you’ve suddenly sprouted blue ears, whiskers, and a tail. And that weird guy in a tuxedo running around behind you yelling, “I’m a wrangler! I’m a chicken! No, I’m the king of the world!”
Aw, man, hold on: Is this a dream?
Did you know the typical wedding costs over $20,000 in the United States and Canada? Between the cake, dress, flowers, and music, the bills can really add up. So you can’t blame some couples for finding ways to avoid turning the special day into a pile of debt.
But getting advertisers to sponsor your wedding? That’s exactly what some brides-to-be are banking on now.
In 2006, one trailblazing couple saved a reported $80,000 by trading their vows in front of a large crowd at a baseball game. They also found sponsors for their rings, the dress, and even the flowers. In fact, so many companies wanted to hawk their wares at the wedding, the couple ended up donating the extra stuff to a charity!
Okay, that was a dream. But it doesn’t have to be. If you know the secret to making money the slow and steady way, there’s a chance you can be a millionaire someday, too. And you won’t have to grow whiskers and a tail to do it.
And even if you aren’t thinking quite that big, learning how to set aside your money can help make your life a lot more fun today. Seriously. Sticking money in your piggy bank or your bank account doesn’t have to turn you into Mr. or Ms. Miser—someone who spends all their time counting their coins instead of hanging out with friends, taking drum lessons, or snorkeling in the neighbor’s pool.
Instead, with a little patience, saving actually gives you more choice about the kind of fun you want to have!
Good question. Americans and Canadians (not to mention many other people around the world) are now spending more money than they make. Unlike your grandparents, who were taught by their parents to save before spending, today we’re much more likely to turn to loans and credit. Then we’re stuck paying it off later…with interest. (Remember? Interest is the fee we pay to borrow someone else’s money.) It’s an expensive way to go. Saving, however, not only makes you money, it saves you even more money in the long run.
Ready to learn the secret to turning a little stash of cash into a big pile of dough? Want to know why savers get ahead in more ways than you would guess? Believe it or not, the same thing that kills us when we abuse credit helps us when we save. That’s right: It’s interest, and it’s time to make it work for you—not against you.
How, you ask? Patience (it’s a good saving skill to learn)! All will be revealed. First, let’s take a trip back in time…
You’re four years old and going to preschool on some fancy university campus. For some reason you’ve been asked to step into the game room. It’s not much to look at. A table, a chair, and a bell. That’s it. But here’s something it does have: a sticky, sweet, puffy marshmallow sitting on a plate. And it’s all yours…only there’s one hitch. The big grown-up who offered it to you gave some instructions you’re not too happy about.
“You can eat this marshmallow right away. But I’m going to leave this room for a little while. If you wait until I return to eat that marshmallow, I’ll give you another one, too,” he says.
What would you do? Eat the marshmallow or wait for the second?
That’s the question researchers tried to answer back in the late 1960s at Stanford University in California with their now famous “marshmallow study.” They asked hundreds of little kids to pick a tasty snack from a tray and then recorded how many of them ate it right away, and how many waited for the better deal.
The results were interesting—and hilarious. Some of the kids popped the treat in their mouths before the researchers even left the room. Others picked it up and sniffed it. Some covered their eyes with their hands so they wouldn’t look at it. Other kids sat at their desks…and stared.
At first, not much. On the face of it, the results showed that some people can delay gratification (resist temptation) and others can’t. It wasn’t until about 15 years later that the study became much more interesting—that’s when researchers decided to contact many of the original preschoolers and find out how they were doing. What did they discover?
For years, psychologists have thought that intelligence was the one-way ticket to success. Now it seems self-control has a big hand in it, too. After all, even whiz kids have to do their homework and hand in their assignments to get good grades!
In a word, everything. Remember back at the beginning of the book when you read that money is never just money? That’s because many of the same rules that apply to money apply to other things in our lives. The self-control that these kids used to not eat the marshmallow is the same self-control they used to study instead of watching TV, or practice piano instead of texting their friends.
And it’s also what allows people to save money instead of spending it.
In other words, if you learn how to save your money, you’re also exercising a self-discipline that can boost other areas of your life, too.
So pretty sure you’re a marshmallow eater rather than a marshmallow saver? Are you doomed? Heck, no. After all, not all of the marshmallow eaters in the Stanford study turned into aimless couch potatoes. A lot of them learned tricks to deal with their emotions and turn off the television to study—or save money instead of spending it right away.
Researchers of the marshmallow study wanted to see if kids could learn to delay gratification. Many of them could—after they learned simple mind tricks.
Here are some ways you can practice your self-control:
Fake it. It turns out one of the best ways to deal with temptation is to trick our brains into ignoring what we want. Try this experiment the next time you go to the mall: When you walk by an item you really want, imagine that it’s not actually real. Now how much do you want it?
Have a goal. If you really want a pair of new, but pricey, soccer cleats your mom refuses to pay for, you have something to save for. Stick a photo of them beside your piggy bank and you’ll be more likely to save the money.
Consider failure. Actually, consider how it will feel if you fail. If you don’t work on your class project for science, what will be the consequences? Will your partner be mad at you for ruining her grade, too? Will your teacher give you a bad grade? Sometimes we’re so intent on what’s happening right now we forget how our actions will make big trouble later on.
Reward yourself. Been studying for over an hour? Grab a marshmallow or something else that will keep you hopping. No one can put off what they love forever…
So…how much cash do you have stashed? A hundred bucks? A thousand? Nothing? Hey, if you fall into the last category, you’re not the only one. It’s official. Whether we’re kids, moms and dads, or aunts and uncles, we’re no longer a nation of savers. According to a Federal Reserve study in the U.S., 43 percent of Americans spend more than they earn. Meanwhile, the Bank of Canada published numbers saying that for every buck a Canadian makes, they spend $1.30.
It turns out that credit—what a lot of people treat as “free money”—makes us feel richer than we actually are, so we spend more. But saving money is still important.
Need another reason to save up? The only other (legit) way to make extra cash is to earn it the hard way. Sometimes, the really hard way.
Blow me down. Before he retired, Richard L’Abbé used to blow himself up for a living. No, he wasn’t a stuntman. As the president of a company in Ottawa, he just wanted to prove his product—bomb- disposal suits—worked. Wearing full gear, he’d stand only a few feet from four sticks of exploding dynamite. “It really cleans out your sinuses,” he’s been known to joke.
I’ll take that. What happens if multi-millionaires hit hard times and can’t pay for their private jets? Call in the airplane repo men! Traveling with just a propeller lock, GPS system, portable radio, and hundreds of keys, they need to track the planes, fly them away—and sometimes deal with pretty angry former owners.
On the road. Again. You’d think reviewing fancy hotels and restaurants would be a dream gig. But for the evaluators—people who decide which ones get four stars or three diamonds for companies like AAA or Mobil—moving from hotel to hotel and city to city can get awfully tiring. Some evaluators are away from home more than 200 nights a year and rank between 800 and 1,000 properties. “You can’t do this job and be a nine-to-five person. You can’t,” says Michel Mousseau, who was an evaluator for years with CAA/AAA.
Weirdly, it’s kind of in our culture to indulge without a thought of overspending or waste. And this affects more than just how we deal with our savings.
Let’s face it, there are better ways to save your money than by stashing it under your mattress. People open bank accounts to keep their money safer and to have a record of their dealings—not to mention earning a little money as interest. All in all, it’s a good idea and still the best way to start a relationship with cash. So what should you look for when you open your first account?
Does the bank offer a children’s account? These accounts rarely charge you fees to store your money.
Checking or savings account? If you plan to move money in and out of the account regularly, a checking account is probably your best bet. If you plan to save your money there for a longer period of time, a savings account will do the trick.
Don’t forget to bring money to deposit, a piece of ID, and a parent or guardian who may have to sign some papers, too.
That’s how long it typically takes for stores to put clothes on sale to keep the merchandise moving. Sales are a saver’s best friends.
In other words, spend money to make money! Sound crazy? Think of it this way: If you want to start babysitting to make some extra cash, use your birthday money to take a babysitting course. Or stock up on cool craft supplies for the tots. Soon you’ll be known as the babysitter parents turn to. And if you’re in demand, you’ll be able to charge more money, too. Your birthday money is a gift that keeps on giving!
Here’s how it works: Grab a bag of cookies or other munchies for your first meeting. Everybody writes down a savings goal (maybe yours is to buy that bike your mom can’t afford). You’ll want to talk about how you plan to get there, too. Cut lawns? Sell your old clothes to consignment stores? Save your allowance and birthday money? It’s up to you. Then meet again every month and track your progress. A little friendly competition to be the first to meet your savings goal will keep you and your buds working hard.
Sure, your cafeteria has got the best grilled cheese ever (just don’t touch the Salisbury steak), but if you typically spend $4 on lunch in the caf, bringing your own lunch to school just two times will save you $8 a week. That’s an extra $300-plus in your pocket at the end of the year.
Do you both like fishing, but he doesn’t have a rod? Lend him yours and borrow your dad’s. You’ll have fun and it’s free if you dig around the backyard for worms.
(You can tell them they would be encouraging good saving habits, don’t you know…) For instance, for every $15 you throw into savings, they’d throw in an additional $15, too. Hey, negotiating with your parents is worth a shot!
Ever wonder why Great-Aunt Bertha gives you the hairy eyeball whenever you don’t finish every last pea, noodle, or speck of burger on your plate? Maybe she knows something you don’t: people in food-rich nations throw out an incredible amount of food each day.
A few years back, a British study revealed that 30 percent of all the groceries people buy in the U.K. eventually gets tossed in the trash each year. That’s nearly seven million tonnes of food—or a pile the size of about a million elephants!
Want to save money? Leave begging for food at the grocery store to the dogs and eat up what you’ve got at home.
By now you’ve learned a whole bunch of new ways to spend less money and save it for things you really want. But is there really such a thing as free money? In a way, the answer is yes. But they’re not just giving it away to anybody.
