When J.J. Hickson, a 22-year-old basketball player for the Cleveland Cavaliers, was asked by Wall Street Journal reporter, David Biderman, about his plans to financially weather a potential lockout in the NBA, Mr. Hickson answered honestly, “I don’t know anything about that saving stuff.”
Mr. Hickson shouldn’t be derided for his candid, and equally horrifying, admission. The struggle to save a portion of what one earns is not limited to professional athletes, though they seem to suffer this problem disproportionately.
Instead, many of us face the same challenge, and we’re embarrassed by it. Everyone knows that saving for emergencies, major purchases, college for the kids and retirement are considered baseline behaviors for the intelligent, and we all like to think of ourselves as smart.
So how do we reconcile our self-image with our behavior? We feel guilty, embarrassed and we fib—to ourselves and others—about how much we save. This fairy tale narrative begets yet more guilt and adds to a counterproductive paralysis that has us saving nothing, since we can’t possibly save enough.
The hand wringing ultimately solves nothing, but action does. The key is to save something, even a modest amount. The first place to start is that emergency fund that will cover six months worth of living expenses. Set aside $1 a day for a month. Then double that amount to $2 for the next month. Double that again a month later and keep that pattern up. Put it in a money market account that’s harder to get to so you’re not tempted to tap it unnecessarily.
In the end, you’re likely to have a bank account that could rival that of an ex-NBA star who couldn’t master “that saving stuff” during his years on the court.
Posted by: Jason Alderman, Visa Corporate Relations on November 23, 2010 at 9:14 pm