Haiku Life Lessons – Abe Lincoln’s Financial Advice

The thought of investing is a bit daunting, at least for me at times, and I used to wonder how I would find the money to put aside for funding my financial goals.  About a year ago I started doing a variation of a technique that I, and many of you, have been doing our whole lives, saving our pocket change in a jar.  I still do this because I hate carrying it around in my pocket, but last year I also started saving my other Abe Lincolns, the five dollar bills.

Every time I’d pay for something in cash and get a five dollar bill in change I put it aside in an old cigar box.  They can add up quickly, so there were some moments where I would purposely pay for something with my Debit Card just because I was running low on my balance in my checking account, but for the most part, I still pay for everyday items in cash and I always saved my $5 bills.

Every two weeks I take them to the bank and deposit them in a high yield savings account.  This money can be used for whatever your financial goals are:

1.  Funding an IRA
2. Opening a CD (like I did)
3. As debt snowflakes for your consumer debt or mortgage
4. To pad an Emergency Fund
5. To save for Christmas, Vacation, Birthday gifts, Season Tix etc.

This is such a simple but psychologically powerful technique.  Try it for a month and see how you do.  If you find that it’s building up too quickly and that you are running out of money in your primary account, at the very least you have an emergency fund of $5 bills.

- Charley