What Happened to POS?
by Sharon Tabor Warren
Give Yourself a Raise
I read questions from people who are behind the eight-ball due to job layoffs and other catastrophes, leaving them no way to pay bills. What ever happened to POS (plain old savings)?
I was taught to pay myself first. When I got my first job many years ago, as a soda fountain jerk (that's what we were called), I put half of every paycheck in a savings account. I was living at home and had no real expenses and I soon discovered the half I kept to spend was too much and some of it went to the savings account also.
I was quite proud that when I wanted something that was not requisite; I could buy it. My parents believed in the creed: buy the children what they need, not necessarily what they want. I'm very proud of my son and daughter-in-law who told their older son if he wanted a Game Boy, he'd have to save his money. He did. Surprisingly, he takes very good care of the item. The younger son is now saving for a mountain bike.
I went out on my own in an era when I earned $50/week and lived at the Y; I saved $10 a week. Ten dollars doesn't sound like much--what about 20%! When I married, my husband had a very low income and some sizeable debts. We still saved $20/month and the debts were paid off within 18 months. After that, most of the debt payment fattened the savings. We had lean times; sometimes we had to draw on the savings, but we also had the comfort of always knowing there was a nest egg.
Today I'm a tax accountant. I'm saddened to see that many of my clients have no interest from savings accounts; most have no investments; some do not even participate in their employers' pre-tax plans. (Pre-tax plans are found money and if there's an employer match, it's even sweeter.) Credit is much too easy to obtain and it's so easy to abuse it. My credo is that if I can't pay it off at the end of the month, I don't buy it. So what about emergencies? (Emergency means something one must have to continue daily activities--such as a new water heater. It does not mean a weekend at a ski resort or even a new outfit.) For true emergencies, I tap my POS!
In the event readers think I've been a big earner, let me say our total income for any year has never exceeded $50,000. We own our two vehicles and a travel trailer, have a stock portfolio, and both of us have IRA accounts which have been sadly downsized by the market of 2000. Currently, we have no debt except monthly commitments but we're about to sign on to a $40,000 mortgage on a new home.
We're not stick-in-the-mud old folks. Among our recent travels: Egypt, Ireland, Alaska, Spain, Portugal, Nepal, Australia (that was a single for me) and I'm booked for Tuscany in September. PIT Programs (National Forest volunteers) have also been included in our itineraries the past three years, as well as a number of writers' retreats for me. We eat very well (usually at home) and dress accordingly. Our charitable contributions are significant.
The secret is POS. Put it away and it will be there when you need it tomorrow--without going into more debt.
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