Save a little each day, soon you’ll have a lot

My son is the only child I know who seeks out reptiles over cuddly pets you can stroke and be boisterous with. It was a sight to behold when we recently went to a pet shop to satiate this urge.
He was not so much leaning forward as giving in to the will and weight of the enormous ball python that had curled up comfortably around his head – sitting askew looking every inch the turban – a live, scaly mass of meat with its head leading my son to where it wanted to explore next.
I am yet to give in to his requests to have his own python – although the one at the shop nearly had me reaching for my wallet when it reciprocated my son's kiss with a peck on his cheek – I have it all on video to prove it.
But I did give in to his obsession just yesterday when I bought him a snake-shaped pendant made out of volcanic rock.
I would normally tell him he needs to use his pocket money for these sorts of purchases – but I thought of it as a keepsake and memory of a wonderful time spent on our holiday together. At "just" US$8 it was a bargain.
Hmm. It's amazing how we think of things costing "just" $8, $10 or $50. We believe that this bit of money won't change our life, so we might as well spend it on something special. Something that will make us feel good. A treat. A meal. A session at the Spa. Shoes. You name it, the list is endless.
Ah. But money is money. And if you keep it – no matter how much or how little – it will make a huge difference to your life.
Time to do some sums: Let's say you save Dh700 a week. That's "only" Dh100 a day. Think about it, over the course of a week you spend many Dh100 on things you just don't need – one pair of killer sunglasses alone can set you back the equivalent of a few weeks at Dh100 a day in many cases – and what's wrong with the pair you own already anyway?
Think.
What else could that money be doing for you?
Well, if we say you resolve to save Dh100 a day, seven days a week, and get 7 per cent compound interest paid out annually, then after a mere 10 years you'd have a massive lump sum of Dh520,661. Cash.
I'll say that again: saving Dh100 a day for 10 years gives you more than half a million dirhams to do with what you wish. Details above.
This is the cold, hard factual truth of what that bunch of 10s and 100s can be doing for you and your life. But are you convinced? Even though we are seemingly logical, reasonable beings, there is some deep resistance to looking at small amounts of money with the same emotion and reasoning as big sums.
For many, there's a giant disconnect between, say, using coupons, and behaving in a generally thrifty way, and accumulating great wealth. But folks, the simple fact of the matter is that one leads to the other. No, I'm not talking being a miser or having zero fun. And I bet you can find that Dh100 a day even if you are a zero saver person. And guess what? I'm not going to bang on about it any more.
This is why: I read recently that the best way to convince someone of an opposing belief is to just show them an image relating to the facts. The research that led to this included beefing up people's self-esteem, showing them the opposing viewpoint in graphical form and getting them to read about facts that go against their grain. The image won hands down.
So the next time you feel the urge to spend "just" a bunch of tens, have a good long look instead at a simple line that charts out the upwards trajectory of your savings to financial freedom instead. I hope it curtails your spending and renews your faith in this miracle of compound interest.
While you're at it, why not stick a photo of your dream home, place to live or way of life on that same chart and I'm sure you'll be on your way to not just dreaming, but making daily changes that will make it all come true. Sooner than you dare hope.
Nima Abu Wardeh is the founder of the personal finance website www.cashy.me. You can contact her at nima@cashy.me
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