Why Saving is Critical to Financial Success

If only I had made more money, things would be easier financially. Does that sound like something you’ve heard or even said? If it does, I hope sharing this story will help you better understand why financial freedom is less about how much money you make and more about developing good financial habits and mindset regardless of your income level.

Like most teens, I spent my early career working at a fast-food restaurant. I worked at a coffee shop throughout high school, and later I worked at a clothing store in my first semester of university. At the time, I believe the minimum wage was something in the range of $8.

I caught my first big job break when I landed a job with a company called Office Depot and got my first significant raise. I was not too fond of the clothing store job because, like most employees, I felt underutilized. The Office Depot job gave me a $0.25 raise which was a massive step in the right direction for me at the time. I was now making $8.25, and that, to me, was an amazing feeling. I was able to pay my gas and car insurance, go out once a while, and save like $25-$50 a month. I wasn’t living the rich life, but I was happy and doing okay.

My second job break came when I landed a sales job with a major telecommunication company. The role was my first sales position, and I was pretty good at it. The people I worked with were all university students or around the same age as me, and we were all driven college guys. We had big plans, and while we had no clue exactly how to reach them, one thing was sure for us, money was required.

My income would go from $8.25 to $11 per hour plus commission on my hourly wage. On average, it meant my co-workers and I was making anywhere from $16-$25 per hour. That meant a dramatic income increase from less than $12K per year to making something around $30-$35K per year in my early 20s.

What do you do with that income increase while having little to no expense? Party and spend as much as you can to have an unsustainable lifestyle.

Six months would go by before I realized I constantly had no money left each month. I would have to sell more phones the next month to cover my previous month’s leverage spending. Remember, at $8.25, I was putting away $25-$50 per month, yet while making $30-35K per year, I was putting away $0.00 per month! I also decided to get a brand-new car (it was essential people knew I was successful)!

When I was a kid, I thought I would be set if only I made the money I made at the cellphone job. Yet, I was making what I thought would be enough and felt as though it wasn’t enough. It wasn’t enough because I was foolish in believing my problem was only because I didn’t make enough money.  The truth is that no amount of money will ever be enough for most of us because we are all driving at a deeper purpose in life. Most of us will never run out of reasons why we need more money, whether it be selfishly or for the greater good of humanity.

We like to believe that having a magical annual income or a lump sum of money will make us happy as it will enable us to do the things we want. Therefore, we focus our entire energy on chasing this mythical, magical number.

It doesn’t matter how much money you make if you never first develop good financial habits and values. Making more money is pointless without good financial foundations and dangerous to your financial well-being.

If you can’t save at $8.25 per hour and learn to be happy with who you are, don’t expect things to change once you earn $80K magically. You can keep telling yourself you don’t save due to your income level, but that’s an excuse. You can keep telling yourself life sucks because of the money, but that’s an excuse not to deal with the pain.

Learning to save or find love within yourself isn’t a magical switch that gets activated at a particular income level. It’s an ongoing process therefore focusing on developing the right habits will help you be more successful around money rather than ones that constantly trick you into believing the amount of money is the primary cause of your troubles.

If you adopt this mindset and learn it sooner than later, you can secure your financial goals while avoiding the trappings of income chasing.