Financial Freedom Starts With Saving

Saving money is the foundation of financial success and must be prioritized before investing or making major purchases. Starting with whatever amount you can save consistently creates the psychological foundation for future financial stability.

• Psychology of saving starts in your mind and spirit, influencing all financial decisions
• Emergency funds should cover 6-12 months of expenses for unexpected situations
• Create separate savings categories for different purposes like emergencies, travel, vehicles
• Current US household savings rate is only 3.90%, down from pandemic high of 32%
• Include children in age-appropriate money discussions to teach saving principles
• Start saving where you are - even 1% is better than nothing
• Money is a tool to be respected and used wisely, not worshipped

Start your savings plan today based on your current situation without beating yourself up about the past. Taking decisive action now puts you in control of your financial future.

Chapters

• 0:00 Introduction to Saving Money
• 4:40 The Importance of Emergency Funds
• 8:00 Creating Multiple Saving Categories
• 11:10 US Savings Statistics and Reality Check
• 14:50 Planning Your Financial Future

Transcript

Speaker 1: 0:00

This is Living your Success 24-7 with Michael Caine. I hope you all are doing well. This year is running from us. Whoa, it's in Superman speed. Anyway, one thing that we can't get rid of, ignore, add to or subtract is time. Although this podcast is not about time, time is factored in almost every discussion you have. It's all relative to achieving your goals, reaching milestones, milestones or failing to as well.

Speaker 1: 0:48

So Today I want to talk about money. Yeah, it's appropriate, dylan, given the show is about living your success. It's not about making money, investing money. No, right now we need to talk about saving. Uh-oh, uh-oh, dangerous subject saving. What do you mean, Michael Caine? Saving? You heard of Rainy Day Fun, emergency Fun, the story of the two squirrels one just saves his nuts, the other one just spends it. Well, I want to talk about the one that saves those nuts.

Speaker 1: 1:37

You know, I know millions and billions of people in this world we live in are struggling. So I know to talk about saving may be something you don't want to hear, but I would be remiss if I didn't talk about saving. And it's not to indict anyone, it's not to look down, put people down or be overly judgmental, because I I've been there, I've been. I lived in the land of broke. I lived in that, that section of town that, figuratively speaking, that you know, struggled, struggled, toil and struggle, but I never experienced the worst that has happened to other people, so I'm blessed. Yes, yes, but about savings. Well, before you can invest, before you can pay off debt, before you can buy a house, a car, you have to save your money. So it's so critical, your money. So it's so critical. It's so important that we talk about the genesis of living in this world and surviving and moving from the survival state to the thriving state, and hopefully this message is received. Well, again, it's no finger pointing. I've been in that land of challenges off and on throughout my life, and so many other people had it much worse that I know of, and so this episode is to be one of encouragement, not condemnation, but we do want to light a fire to get people moving in the right direction. There's so many books out there business books, personal finance books and radio shows, tv shows, podcasts, talks about oh, you're going to be rich in six months, rich in a million, have a million dollars in five years. I'm not that show, and so my show is to pump you up to motivate, to help you motivate yourself to get to that level. But that's not my main mission.

Speaker 1: 4:29

And he said well, isn't your name in the title Living your Success? Yes, it starts with the mind. I encourage you to read that book, psychology of Money. I mean it really does start in your mind. I would say it starts in your spirit, into your mind. So I added another step and so it's important that you do this sooner than later in your career, your job, your life I would say elementary, elementary school Start saving those pennies and dimes.

Speaker 1: 5:06

I did, I used to, when I was at. I saved pennies and dimes and quarters and dollars from birthday presents to Christmas to just because doing chores as well, earning it as well as it being given to me as well. I saved, always saved, a fraction. I miss that. Michael Caine the one had his stuff totally together and didn't let anyone detour him until he grew up and then he acted a fool, listening to other people, trying to be like other people, trying to impress other people. So I found my mind. Try to impress other people, you know. So I found my mind and I'm going to help. I hope a lot of people find their mind If I stop listening to other people following them. You got to do, you be you.

Speaker 1: 5:57

And so First of all, yeah, you have to earn money to save it. So I'm going to have an entire podcast about career and job development, vocation and school, vocational or academic, and we'll have a whole podcast on that. To earn the money so I'm at step two here. You have a means to earn money. Now what to do with it? So we're going to go On another episode and just talk about the workforce, labor, working, earning. So right now I want to talk about savings. So so it's vitally important that when you earn your money, your earmark excuse me, no frog in my throat, something like that kind of dry.

Speaker 1: 6:59

Anyway, it's important that for every dollar you earn, that you save a portion of that for the future. And keep in mind, folks, the future could be tomorrow you could get a flat tire and have to buy a new tire tomorrow, don't you know? So think in terms of short term zero to one year, and then one to two or three years, and then three to four, five, six, seven, eight, nine, ten years. Think in terms of segments as far as what you need to save your money for. And so emergency fund is repairs. It could be the roof, the car stove, refrigerator breaks down, bicycle, whatever. These are necessities. I'm not talking about things that aren't necessities. Okay, that's another podcast tip. So we're going to use our sense and understand these are necessities, not wants that you need to prepare for a rainy day. So let's say, for every dollar we'll say, um, whatever you save at is up to you, but I would say as much as possible.

Speaker 1: 8:12

Now, aggressive people out there, like I once did, I saved half of my income and then went down to 30, 25% of my income and to damn near zero at one point. That's when I lost my weight. You know, stop saving and and just spending it all. And so then I got my mind back, started saving aggressively again, and so I encourage you to stay on the road to saving that pathway for emergency funds. And, um, and once you have the emergency fund, which that depends on your income, your lifestyle expense, you know could be, say, 10 percent of your money, 5 percent, 25 percent of your money for emergencies, or it'd be nice if you have at least six months, at least minimum to me. Six months to a year, six months is a drop dead is where is where? If you lost your job, you can survive six months to a year. Six months is a drop dead as far as where? If you lost your job, you can survive six months for sure. But now, outside of that, saving for survival, emergency fund, saving for a new car, a new house, a vacation, college for the kids, a class for you, travel for you, and so what I did?

Speaker 1: 9:35

And I, oh my God, I don't know what's that book's name. Money is my Friend and I loved that book years ago. I got it 30 some years ago, I don't know where it is, and it talked about saving, having a millionaire account, a financial independent account. And so I have these different funds of funds where one is for a new vehicle, one is for travel, one is to do whatever we want to do, one is for emergency, et cetera. You get the idea and it's named for different things and it's only used for that purpose once it gets in there.

Speaker 1: 10:13

I know emergencies can happen where you need to dip, I understand, for survival, you do what you got to do, but we're talking about non-emergencies. Save that money. So it'd be nice if you could save. 10% would be good, 5%, 5 to 10. Start where you are maybe 1%, but it should be something. And so you're not alone.

Speaker 1: 10:39

You say, well, I'm the only one that sucks, I'm not saving. Well, let me give you a little statistic. Right now, the household savings rate in the United States is 3.90%. So, out every dollar, you're saving just under four cents of every dollar. Every $10, saving three, almost $4. You get the idea that's nothing, but if it's all you can do, it's all you can do. Start where you are. And the personal savings in the United States from 1959 till 2025, 8.40%. Better than what it is now, but still sucks.

Speaker 1: 11:26

Guess what period in history the savings rate in the United States just blew up. Just great, all-time high. You got it right the pandemic. And 32%. 32%. So out of every $100 earned, people were, on average, saving $32. We need to get back to that level. So just do you and worry about you and pray for your other family and friends and people. You don't know that they do what they need to do too. You can only do you. So I encourage you to do as much as you can, but do something. Don't wait and say one day when I get a better job, one day when I, if it's pennies, whatever it is.

Speaker 1: 12:19

We're talking about the psychology of saving money, and that money is enough will lead into another podcast about now that you're saving all this money stream. Where do I go on vacation? Where do I invest my money? What stocks, mutual funds, etfs, indexes, all that real estate? Where do I invest it? That's a whole nother episode. But first, true, we got to earn it. Next, we got to save it. Save it for survival, save it for fun and other activities in this world. So it's pretty piss poor. Since the pandemic, 32% Wow. In 2020 and in 2005 is a 1.40%, which is nothing, a penny on every $10. $10, not even a penny for every dollar. So I encourage you to get a new habit and save some money. And I forgot maybe you want to save for a wedding. You want to put all that on a credit card, and a lot of those people get divorced, by the way and argue because they don't have the money. Spend up all the money on a wedding as opposed to focusing on the marriage. Yeah, so that's another podcast. I just gave you three podcasts I'm going to do in the future At the center around just about saving money and not spending all your money.

Speaker 1: 13:51

It's not pretty. A lot of people just foolishly spending all their money. They don't have anything left over, and I'm talking about things that are want to, not needs. It's one thing to spend it all on necessities and also you need to teach your kids on the principles of saving their money so that they can grow up to be well-to-do. I'm not saying filthy rich and millionaires and all that stuff. It's possible.

Speaker 1: 14:22

Another podcast, a lot of podcasts, are telling you oh, they can get rich and get half 50 million. Maybe they can, but that's not the point. Point is to enjoy this life as well. It's not all about the money, but I tell you I'd rather have money than not have it. So, but we don't want to worship it, we just want to respect it. And it's a tool. Money is a tool and so it's important that you get and use it, just as it is a tool.

Speaker 1: 14:57

And possibly another podcast is greed. People get greedy and then they lose it all. So be somewhat semi-conservative with the bulk of it. Be somewhat semi-conservative with the bulk of it. Let's say 90, 95 percent and you spend 5 percent doing risky stuff. If you want investing in stuff that you may lose everything if you put all your money in it. So don't put all your money in it. Just have a fraction 1, 2, 3, 4, 5 percent at most, and that's if you could afford it.

Speaker 1: 15:24

I'm not giving financial advice. Give my opinion. So it's important to have a plan, work with your significant other and your family, have money talks every month, every week, and where you discuss the direction of the dollars the Benjamins, so to speak and get the kids involved so they understand about saving. Flexible. They need to learn and not be controlled. You know age appropriate, obviously. So don't want to preach to you, but just I want you to do well, I want you to succeed and I want you to be able to go to the next another podcast where it's what do we do with all the savings now? To invest some of it, save some of it, some of it air market for different things that you want to do. Right, take a family on a European vacation or something, or? Or just here in America is good to stay occasions.

Speaker 1: 16:25

Do what you can Enjoy your life, stay patient, do what you can Enjoy your life. So I think I said it all today. Well, I probably haven't said it all, but I said enough. So that's it. Get your plan. See how much you make, see how much you can comfortably save each month, each week, however, you get paid. And start from where you are. Folks, don't beat yourself up. If I would have, should have could have already did that song and dance. Do what you can today and everything will be okay. Because why? Because you say so, because you're taking decisive action and not just letting life pummel you to the ground. So that's it. This is Living your Success with Michael Caine 24-7, until we see and talk to each other next time. Adios, my friends.