Is a penny saved always a penny earned?
The old adage may seem useful as we look toward 2020, and its inevitable focus on, among other things, improving our personal finances by putting “pen to paper” and creating the obligatory New Year’s resolution budget. As resolutions go, it’s right up there with losing weight and exercising. On average, based on a recent Fidelity.com survey, almost 40% of us create new budgets annually with the hope of improving our financial situations.
While the resolution is made with great intentions, we need to remember that adopting a philosophy of frugality first could lead to a potentially short-sided approach. Spending as little as possible in all circumstances, and hoping this will keep us on track toward financial goals, can backfire.
Instead, consider the ant.
Proverbs 6:6-8 (NIV)
Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.
That wise ant isn’t saving every possible penny. But it is storing what it can in the summer, so it has the provisions needed in the fall.
As you think about your 2020 resolutions and financial plan, remember that one size does not fit all concerning spending habits. For example, in my personal experience, I’ve found that tracking my spending, using a cash system and adhering to conventional approaches such as the 50/30/20 rule (spend 50% on needs, 30% on wants, and save 20%) only takes me so far. Frugal budgeting and wishful thinking doesn’t always work – the unexpected happens, and I need to be prepared.
With that in mind, and in the spirit of the upcoming college football playoff games, I suggest it takes both a good budgeting offense and a frugal spending defense to best protect us from financial instability. Be proactive in your budgeting resolution, and consider investments that can prevent diminishing returns on your assets. Go beyond changing the oil in your vehicles regularly – schedule those recommended service tune-ups too. Preventive maintenance, whether on vehicles or your major mechanical systems at home, can help you find and resolve issues before they turn into large expenditures later.
It’s a case where a penny spent can be a penny earned.
How can you best decide when to spend and when to save? A blended approach of investing and saving with a reminder to take the long view may prove beneficial. Remember, that smart ant didn’t google “Top 5 budgeting ideas for 2020.” The ant considered what would be needed in the fall, and put the provisions away in the summer.
Will that approach, that resolution, move us closer to the proverbial “ride off into the retirement sunset” endgame that we all strive for? At the very least, it can be a step in the right direction. Here’s to a happy, prosperous New Year!
Rob Stader, Customer Experience Manager, Lee Company – www.leecompany.com