Money is
Power or Cash is King still applies today. People feel powerless and helpless
when they have little to no savings or retirement account, live paycheck to
paycheck or experience a financial crisis. You feel more confidence, in control
and powerful when you have a savings and/or retirement account - when you do
not have to worry about how you will pay for car repairs or a broken furnace.
People who do
not save feel a temporary sense of power when they buy something that they
believe shows they are powerful such as a “BMW”, “going on vacation to a
Caribbean island or buying a designer item such as Luis Vuitton. However, these
feelings erode quickly when the credit card bill arrives – they go back to
feeling powerless.
They also
experience these feelings because they are treated differently by society. For
example, someone living paycheck to paycheck may go to a liquor store or
checking cashing store to cash his paycheck. However, if that same person went
to a bank to deposit their paycheck they would have a different experience
emotionally.
If two people
went to a Friday’s restaurant and paid with a credit card, one paying with a
MasterCard and another with an American Express Centurion Card, the Centurion
card owner already feels more powerful due to how they are treated by society
and previous experiences. The server may subconsciously or consciously treat
the American Express Centurion Card owner differently because the credit card
is a status symbol – a symbol of power. The MasterCard owner may not be treated
the same because anyone with a certain credit score can be approved for a
MasterCard but not everyone can be approved for an American Express Centurion
Card.
The key to
encouraging yourself or someone else to save is see how savings will benefit you
not just in terms of retirement but real life examples of how it will benefit you.
Some benefits of a savings account include compound interest, cash back rewards
for some debit cards, emergency fund, provides additional payment options
(cash, check, money order, cashier’s check, debit card) and to pay for
unexpected expenses.
Nothing last
forever and nothing stays the same forever. Life happens and things are
constantly changing. Possessing a savings account will help you deal with
changes in life much easier than applying for a payday loan or making other
risky financial decisions because you do not have a savings account.
Set a savings
goal, automate savings, look for high interest earning accounts and read your
statement monthly to reconcile your savings account.
