Overcoming Debt, Achieving Financial Freedom

Chapter 7Save with a Purpose

My dad has always stressed the importance of saving money. Cindy, hay que ahorrar (Cindy, you must save), he would say. Although his advice was well‐founded, it took me decades to understand why and how to properly save.

Does any of this sound familiar?

• You tell yourself that you will save whatever is left at the end of the month. The end of the month rolls around and you either (i) did not save at all or (ii) saved less than you wanted.
• You have ambitious moments where you deposit a significant amount into your savings account but find yourself chipping at that amount with frequent withdrawals.
• You consider your savings account similar to your checking account.
• You are not a stranger to bank fees (e.g., failing to maintain the minimum required balance in your savings account).
• You do not create annual or monthly savings goals.
• You sometimes question your savings efforts, perhaps wondering: what is the point of this?
• You hoard money in your savings account and hesitate to spend it because of fear, your upbringing, a previous experience, or because you simply do not know what to do with it.
• You have had your savings account with the same bank for years, without any real thought as to whether that bank is the best option for you.

For most of college and law school, I used the same savings account that my dad helped me open when I was in high school. You might assume that by the time I graduated law school (at age 26), I had built a sizable savings ...