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book excerpt

Sharon Pilkey

The following is an excerpt from Saving Money: The Missing Link by Joe Atikian. Copyright © 2011 by Joe Atikian.

3 Easy Pieces

How can saving money possibly be easy and enjoyable when everyone says it takes years of discipline? First, change your mind. Next, open a separate account for saving. Last, keep adding to it. Is that all there is? Yes, that's basically it, although the first part is the hardest because we are continuously trained to dislike saving. Changing your mind may also take a couple of steps, but in fact you already know what those are.

As much as your parents tell you to save, they never tell you why you will like it. You hear about the unavoidable pain of saving but never about the joy. You hear about making sacrifices to save, but not about the new choices that saving brings. You hear about the discipline required, but never about the relief from daily stress. Pain, sacrifice and discipline. Groan.

Even professional advocates of saving money turn you off. The banker in the TV ad says that the big banks are going to pinch you with excessive fees, but you can save a bit of money if you switch to his bank. The head of the central bank says that saving money will prevent national economic trouble. Financial planners say you will retire in poverty if you don't save. Getting pinched? Economic trouble? Poverty? So much negativity naturally leads to a big turn off and it's easy to see the effects. National savings levels are low, personal debt is high and people who advocate saving are somehow confused about why this happens.

The only thing that drives people is desire, so they simply ignore the sour messages and instead focus on their immediate wants. That would be shopping, dining or travel. Everyone wants love, security, a full belly and a full closet. A beautiful house or a major renovation would also be nice, along with a new car. Oh, and some new shoes. Saving money and new shoes don't go together (at least according to scrimpers, budgeters and coupon clippers) so people will just ignore the saving for a while.

So if all the experts turn off the drive to save, couldn't people simply encourage each other to do it? After all, people discuss real estate, cars and clothes all the time. It's almost a social pastime in which they brag, compare notes or complain. Don't they discuss their wages or salary in the same way? Sometimes they do, such as in unionized workplaces where all wage rates in a collective agreement are regularly published. But, in reality, talking about real estate is just a substitute for talking about salary because someone can get a pretty good idea of your household income from what you say about housing prices. So it turns out that people will strongly hint at their income even if they don't discuss it openly. When it comes to saving though, things get strangely quiet.

For some reason saving money is the most private of all possible topics. Can you just imagine this in a casual chat: "Hey, Jim, how much do you have in the bank?" This practically never happens. Saved up money is totally invisible, and that makes saving as desirable as getting a dental filling. You usually avoid it, you feel better once you have it, but nobody else can tell whether you got one or not. Likewise, the usual privacy around saving money doesn't bring any appeal to doing it. You may show people around your lovely home, but you will never get the chance to chat about your great success at saving money.

There is a list of good reasons to save. Save for a rainy day. Not bad, but not too inspiring is it? Save for something big. That means you should save in order to spend big and end up exactly where you started, with no spare money. Not too clever is it? Save for retirement. That one works too, but it tells you to spend like a miser during your younger life so that you can spend like a miser through your older life. Not so motivating is it? What all of these old reasons share is that they portray your financial life as dreary. The promise of being stuck in a world of low-spending boredom will never move anyone to change their ways.

Many factors push people away from saving money, while the taboo around discussing it doesn't help pull people toward it. And most strangely, all the players from parents to bankers to financial advisers keep on missing the obvious path to saving money: the desire to do it. Almost everyone says that they want to save more money, but throughout our lives the authorities have concentrated on the negative and the difficult view of saving. They have also ignored the reasons to desire it. More precisely, they have beaten the desire to save out of us. Once you change your mind about it though, saving money changes your life in some important ways that you may not have expected.

Is there really a better approach than to treat saving as a private nuisance? Of course there is. Just direct your mental focus away from saving money as a task. Do it now. Stop thinking of it as a chore. Because, in fact, saving money isn't a chore. Certainly not a big one. It doesn't require you to do anything more than put some money into the bank each time you get paid. The wealthy barber and the automatic millionaire have already explained this step clearly enough (even though they missed the most important link). If you think that's too much to do then you are finished before you start, so don't be that way. Stop it. Instead of dwelling on saving as a task, just take a minute to ponder the lovely money you have just saved. Then move on with your day.

So where is the fun? It's right here in 3 ways. At first, there's a bit of fun in watching this small stash of money grow. This feels really good. You'll soon realize that it's better to see $50 grow to $1,000 than it is to constantly struggle with a measly $40 balance at the ATM. This is what you have always desired. For a while, you may even forget to pay any attention. Then suddenly, your balance is a lot bigger than you thought possible. It might be around $12,000. This leads to the second bit of fun: now you realize that you are growing financially stronger. You wanted this so very much, and now here it is. Desire fulfilled. This is good.

Now you have more flexibility to do things that were out of your reach just last year. More importantly, you have gained control and that too feels really good. You know that you can spend a bit, but you also know that you don't want to go back to your old position of financial weakness. Spending is now less appealing than saving exactly because you realize that spending leads to less power and less choices. Of course this is merely short term stuff. The real fun, the third part, is yet to come. Once your mindset is changed, your personal power grows. This is not just financial power any more. This is the big payoff to saving money.

Reprinted by permission of Joe Atikian. Copyright © 2011