How to Start a Nest Egg

My dad has a cute little saying he uses to explain his philosophy of saving money: Pay yourself first.

It’s his simple explanation of how he and my mom, despite raising six kids, managed to save enough money to see themselves comfortably through 20 years of retirement (and counting). “Pay yourself first,” means that money goes into savings for the future first, before it goes into Mom’s or Dad’s (or the kids’) pockets.

Like many of his generation, my dad entered World War II as soon as he was old enough, then returned home after the war to get a job, start a family, and go to college on the GI bill. As soon he was eligible to get into his employer’s investment plan via payroll deduction, he did so.

“Mother and I talked about it once, and we never talked about it again,” he said. “I considered it an emergency fund.”

The fund was occasionally dipped into for major emergencies. But by and large it sat there and grew. Over the years Dad diversified his investments, but rarely took risks.

This philosophy has served him exceedingly well. Though he never could have imagined his employer, General Motors, going bankrupt, he saved enough in other solid investments to stay on an even financial keel.

As the oldest of those six children, I can tell you that it wasn’t always easy. We didn’t take vacations, but there was always food on the table. Though I didn’t know about Dad’s plan as a child, I grew up with an abiding sense of the value of hard work.

Today’s parents can set the same example for their kids, who are bombarded with all sorts of expensive, “must have” electronic gadgets du jour.  No matter how your child earns money, teach her how to save it, if only as a stepping-stone to bigger and better down the road.

How to start a nest egg? Simply start.