Last month I was referred to a young fellow who wants to open his own business. He was pleasant, energetic, knew his stuff too; all good qualities to have, especially if you're self-employed.

We started out well enough. We talked about his long-range goals as well as his current circumstances, exploring how they might influence each other. When I learned that he had no real savings, I recommended that he begin putting away at least 10% of his income. Well, that's when things took a left turn. He became quite irritated and told me that there was absolutely no way he could do that; every penny he and his wife brought in was already allocated and they just couldn't afford to hold on to any of it. Everything he said thereafter just demonstrated all the more that he really NEEDED to have some savings cushion: his wife's position was not secure; the business she worked for may be folding, they had just had a baby. Despite my best efforts, he was not willing to consider putting his family's security on the front burner. Instead, he decided not to hire me as his coach, because he said, "I wasn't the 'right kind.'" Hmmmm.

I've seen businesses come and go and those who cannot handle the money at home typically take the same habits into their business and before they know it, they become a failure statistic. So, regardless of how you are employed (employee vs. self-employed), saving money is smart for some obvious and some not-so-obvious reasons:

Working becomes more FUN! If your entire paycheck is spent on basic survival needs, going to work every day can be very depressing.
Saving a portion of your hard-earned dollars is empowering because the decision is made not only by you, but also for your benefit.
There is an excitement that comes from watching the savings account grow. And when we see our dollars grow, we become more conscientious in our spending habits.
Taking care of self brings about a sense of freedom. If you find yourself in a difficult situation where you feel your values are challenged, you are more likely to say so if you have been taking care of your self in other ways. Regardless of the degree of difficulty, or who the person across from you happens to be (like your boss?), you will be truer to yourself and more direct with others. The act of self-care and financial responsibility promotes personal freedom.
Many financial experts recommend investing at least 10% of our gross income into something that can actually make money. That means finding an investment opportunity that will earn money for you on your behalf. Some people choose real estate, some the stock market; if that's just way too risky for you, then consider bonds or some other safe investment. I recommend George Clason's book entitled "The Richest Man in Babylon" for a no-nonsense approach to financial planning and personal prosperity. For information on how to purchase Clason's book, click here: The Richest Man in Babylon
Practicality and reality rule! When we are truly fiscally responsible, we do not do things that can jeopardize our financial health. More to the point, we will not forego saving or buy things we cannot afford because we are fully knowledgeable of our financial circumstances and responsive to our best interests. We live within our means.
One secret to success is modeling what other successful people do. Most every successful person I've ever met saves at least 10% of their income and invests it. Create your own success story.
I cannot tell you how many times people have looked at me, given me an impish grin and said, "I wish I could do that, but I barely make my bills as it is." The truth of the matter is that you will never miss $1.00 out of $10.00 or $10.00 out of $100.00. So my suggestion is no matter how much or how little money you make, do it!

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ACTIONBegin now by first opening an extra bank account. Take 10% from you next paycheck and put it in this account. Continue to do this with every paycheck you get. You are going to be so pleased this time next year when you see the reserve of money you have set aside. Talk about peace of mind!

About the Author

Diann Cannon, founder of Signals Personal and Business
Coaching, works with individuals facing major life transitions, such as
divorce, unemployment or career change. She helps them identify their
strengths and confront limiting beliefs and behaviors. Ultimately, she
helps people achieve success and balance in their business and personal
lives. Contact Diann and sign up for her newsletter at
http://www.signalscoach.com.