Is a penny saved a penny earned?

Of course, it is.

But most of you will disagree with me. To you, earning a penny and spending a penny is not a matter all. You always feel, that pennies can never make big money. You would consider tons of dollars\euros, as the only big money you would ever want to possess.

You are in for a surprise.

In reality, a penny saved is a penny earned.

Do you know how?

The initial starting point of a hundred dollar is a penny. Hundred dollars convert into thousands of dollars, and so on. When you spend all of your money, you will eventually become penniless. On the contrary each penny you save, accumulate and multiplies to transform you into a rich person.

But as today’s modern youth, you would never agree that a penny saved is a penny earned. It is because, you do not have the patience to watch the slow growth of your pennies amassing into huge money.

You earn a lot and spend a lot. Most of you never save money for your future. You put off saving money, as you feel you have lots of important financial commitments to be met. Month after month passes, with you not saving a penny worth of money. You do not realize, that slowly but steadily your financial security is being eroded because of your unsaved pennies.

“My budget for my shopping was hundred dollars. You know what? I finished my shopping within ninety dollars” my daughter told me after returning home from her shopping.

“Well, you have earned ten dollars then” I told her smilingly.

“How can you say so, amma?” my daughter seemed bewildered by my answer.

“Since you planned your shopping properly, you have ten dollars in your kitty” my answer made her laugh.

Intelligent shopping made my daughter save ten dollars. By saving ten dollars, my daughter showed that she was in total control over the money she had for her shopping.

Yes.

The control of your money should be in your hands. You should never be at the mercy of your money.

Are you confused?

When you spend beyond your budget, you are just throwing away your money.  It also implies that you do not know how to manage your money, and that you have no control over your finances. This emphatically shows, that you are allowing money to control you.

Money literally drains through your purse\wallet, due to your thoughtless spending. When your penny is out of your hands, you have lost it. But when you save your penny, it becomes your earnings because you have it with you.

When you spend within your budget, it shows that you are totally in control of your money. It also highlights that you know how much to spend, and how much to save. When you manage your finances intelligently, you become the master of the money you earn.

The literal meaning to this beautiful proverb “a penny saved is a penny earned” is simple.

It just means “spend money wisely. Save money cleverly.”

What is the use of earning thousands of dollars, when you do not know how to spend it?

Life is so uncertain.

You might lose your job because of the recession, and financial bankruptcy many countries are facing today. If you do not save money for such emergencies, you will be knocked down by the deprived financial situation you put yourself in.

Are you venturing out for shopping?

You must plan your shopping. Do not buy whatever catches your fancy. Looking back, you will be shocked that most of the things you bought were not a necessity, but a momentary lapse of control on your part.

The money you earn was unthinkable, many years ago. But though you earn a lot, you are always in paucity of money.

Why is it so?

Since you earn a lot, you feel you are rich. You want to show your affluence to your friends, relatives and colleagues. So, you spend beyond your income. Banks make you feel even richer, by granting you credit cards with huge cash limit. You also spend reckless money to maintain a good lifestyle.

Sadly, in the bargain you forget to save money. You also forget that each and every penny you do not spend, is each and every penny in your hand.

“Does it mean I should not spend money? What is the use of me earning thousands of dollars, when I cannot buy anything, I like? I might as well not earn at all” This is your modern mentality in dealing with the money you earn.

So, you spend irresponsibly, without saving for a rainy day. You forget that a rainy day comes in everyone’s life. When you do not have money as a back-up, your day-to-day life itself becomes a torture. You will struggle to make both ends meet. When you have no money, you lose your self-esteem also.

On the other hand, if you save your pennies, you do not have to fear any financial emergencies. You feel a lot more relaxed and tension free, as you are able to manage any financial needs of your family.

Can you now see how a penny saved is a penny earned?

Managing money is just a simple mathematics!

I read about a funny incident in the newspaper, and it somewhat amused me.

A villager in India won a huge amount, as a lottery prize. The man was carried away by his lucky wealth. His sudden money, changed his lifestyle completely. He always had a group of money leeching minions around him.

Since the money came through sheer luck, the man did not plan his money.  He did not know the value of money, as he did not earn it. His sudden richness blinded his commonsense. The man literally threw his money around. As he did not like the food in his village, he would travel miles in a rented car for a breakfast.

How long do you think this sort of reckless spending would last?

Very soon he lost his money and now he is back to where he started- a daily wager.

Where did the daily wager go wrong?

He had the freak luck of winning a lottery prize. But he spent money, without saving pennies for his future. He did not realize that a penny saved is a penny earned.

What should you do to save your pennies?

Put whatever left over money in a piggy bank. Count the money you had save after a year or so. You will be astonished by the sizeable amount of money you had accumulated. The money you saved finally became the money you earned.

Make your first spending your savings. Do not touch your savings. Let it accumulate.

Conclusion

‘A penny saved is not a penny earned if at the end of the day you still own a quarter’- Mary Landrieu

Anything can happen in your life. You might lose your job, or you might have an increased expenditure in your family. If you do not have the back up money, you will only feel dizzy with confusion as to how to manage the money problems you are facing.

So, be careful and save your pennies.  Even a billionaire initially started his success, through the pennies he earned.

So, the reality of money is a penny saved is a penny earned!