Planting a Seed of Savings

Here is an article from my early days of blogging. This was originally published on April 5, 2010.

I still remember when I was a student and I didn’t have any savings; what came in my chequing account left again rather quickly. In this series, I want to talk about how you can shift from a habit of spending everything that you earn to a habit of setting aside something each paycheck; of planting a seed that will eventually grow into your tree of savings.

Money Tree

First, what are the benefits of having a tree of savings?

  • It’s a nest egg to take care of you should you lose your job, decide to buy your first home, or decide to start your own company.
  • As it grows, it will begin to spin off dividends for you in the form of compound growth and interest income.
  • Eventually, like a real tree, it will get to the point where it can grow on its own without additional input from you.

Well, suffice it to say, the benefits of having savings are pretty obvious. The question is, if you don’t currently have savings and most of your money is going out the door, then how do you start? Whether you are a student only making minimum wage, or a young professional making a good salary but spending most of it, the key in both cases is reducing your expenses. What are the culprits? They include…

  • Housing
  • Clothing
  • Shelter

We don’t have a choice but to pay for these expenses. But for many of us, they also include…

  • Eating out
  • Expensive vacations
  • Expensive cars

It’s definitely important to enjoy life, but if one lives by the motto “you could die tomorrow”, then every day where you are NOT dead, and still alive, is a day where you still have nothing to back you up and you are still a slave to your job (or whomever else is giving you your salary).

Consider what you would do if your rent suddenly went up 10%, or if your car insurance went up 10%.  It would mean less money to go around, right? You’d invariably have to cut back a little bit, finding more efficient ways to spend your money, looking a little harder for deals, perhaps eating a little less often at that nice restaurant.

Instead of waiting for your living expenses to increase, as they invariably do, why not do this little trick: Pay yourself first. What does this mean? It means, go to your bank, set up an automatic payment program, and have them put aside 10% of your money into a savings or investment account before you even see it in your account. You can start out with savings account, Bank CDs or GICs. Once you have a base of savings, you can then move on to ETFs and low-cost indexed mutual funds. Just like what would happen if you had a small paycut, or if life suddenly got more expensive, you will soon adjust to the new situation. Even better, you will be putting money aside and it will be growing.

How much can it grow? Let’s say you set aside $150/month to put into your savings. $150/month is less than the price of a movie date every weekend or lunch at McDonald’s every day! Add in 5% of compound growth, and that $150/month can end up to more than $10,000 after 5 years. That’s more than enough to buy a very nice gift for yourself and that special someone… or to just keep growing your tree of wealth!

A good, short read that I recently discovered and that will help you get started is The Richest Man in Babylon; the chapter summaries can be read for free on Wikipedia. The book is essentially a set of parables set in ancient Babylon, and cover the ways to gaining and keeping wealth. They were written by George Samuel Clason in order to teach people about personal finance and get them on the road to savings. I’ll be covering the chapter summaries and the basic lessons they present in future posts. Another good book to help you get started is The Wealthy Barber.

The Hanging Gardens of Babylon

In my personal experience, I only really started to grow my own money tree a few years ago. If you haven’t yet started, then it’s never too late to start; if you already have started, then what made you head down the road of savings? Were you always a saver, or was there a time when you realized that you were fed up of being a slave to your paycheck? 😉

Don’t forget… whether it be $50 a month or $500, something is better than nothing, so go out there and plant your seed of savings!

Originally published on April 5, 2010.

Related Posts Plugin for WordPress, Blogger...


  1. says

    It is fun go look back and see how we got to where we are. Your post is great for people just starting out building a nest egg. I am about to spend the bulk of my wealth on a home down payment, so starting over is very timely.

    • says

      I was there about one year ago, so I know what that’s like! It can be quite a substantial chunk of change especially if you’re younger and in an urban area. Congrats on your future home. :)

  2. Sliding Glass Door Handles says

    its very awesome post.. very relevant..Your post have a big help for people who just starting out building a nest egg. keep it up!!

    • says

      It was an interesting story and one with valuable lessons. You know even the wiki chapter summaries are good to follow… I started out with those.

  3. says

    This is a great post Kevin. It reminds me of my own experiecne with saving.

    I read The Richest Man in Babylon when I was 19 years old, but I didn’t start saving until I was 21. I started out saving only $25 per month, but soon I was saving hundreds. It’s so easy to save once you get started. I read The Wealthy Barber last year and I highly recommend it. Both of these books are great for someone who is getting started with saving and personal finance.

    • says

      I started to save around 24-25ish, I would say. Once I graduated and was able to start working full-time then it started to take off. It’s definitely a good habit that will grow on you as you continue. When you don’t have much, even saving a few hundred is a good feeling.

  4. says

    Isn’t it amazing kevin to go back and read some of the stuff you wrote when you started? I like doing that at night sometimes it is almost like opening up a diary to see where I was at that point in my life.

    • says

      Hey Evan,

      I love that part about blogging. It’s definitely neat to see where we started and where we’ve gone from there. I can’t believe it’s already been nearly 2 years… now that’s insane.


  1. […] Invest It Wisely encouraged us all to plant the seed of savings. […]

  2. […] it Wisely – Planting a Seed of Savings Punch Debt in the Face – You’re not Debt Free if you Have Debt Beating Broke – Taking […]

  3. […] it Wisely compares saving to planting a tree. It turns out all you need to do is start saving money, and then you’ll have your very own […]