My first child is due any day now. I am a Daddy-To-Be! I am very excited and a bit nervous, as I guess most people normally are when something (or someone) new is on the horizon. There are so many new things about this experience: a new person coming into the world, a new person to laugh and play with, a new person living in the home, new sleeping (or not sleeping) habits, a new person to look after physically, emotionally, and financially, etc. etc. My excitement about finally getting to meet her (she’s a girl) face-to-face is outweighing all else at this point. At the same time, the other things are still on the back burner of my mind as they are essential components of taking proper care of her.
Let’s take dealing with the upcoming new financial responsibility, for example. I have always made a habit of emptying my pockets at the end of the day and putting all of my loose change into a tin with a coin cut-out slot in the top. I never fumble for exact change at the cash register (‘Just give me a minute here, I am sure I have a penny somewhere in this wallet. Let me check another of these sixteen separate compartments in my wallet. No, that’s not it, that’s a dime. How much was it again?’), I just fork over a bill and take the change. It’s sort of a forced savings plan for me. On average, I can save about $100 per month with this thrifty habit. I don’t miss the change because because I never have it in my pocket for very long before I put in in my tin bank. About every other month I empty the tin bank, roll the change, and take it over to the much larger real bank for deposit. Up until now, I have used this money as a prepayment on my mortgage. This frugal technique has saved me significant interest costs over the years.
A few months ago I opened a new chequing account with the express purpose of saving for my daughter’s future education. This will give her a pretty substantial nest egg by the time she is ready to think about post-secondary education. Of course, you could do whatever you want with this money. If you have debt (especially credit card debt), you could use this money to reduce it (a top priority in achieving financial independence). You could also invest it, use it as yearly family vacation money, or to buy that new flat screen television. Whatever you choose to do is up to you.
This frugal habit works for me because it is exactly that – a habit. I don’t miss the money because I’m used to not having it in the first place. It ties in nicely with the idea of paying yourself first. It helps me make the most of what I have by taking a portion of what I have, making it ‘disappear’ from my consciousness, and earmarking it towards a key priority. It is a froogalism!