Free (as in beer) money

I’ve had a number of conversations with friends, colleagues, and coworkers, and am continually amazed by the number of people who are willing to throw away free money. Whether it isĀ  money that you won’t see for years to come, or a small amount of cash that will take next to no effort to get, many people will turn down these opportunities. Two basic areas where I’ve met the most resistance are matched 401k plans and regular old savings accounts.

Enrolling in your companies 401k is an easy way to save for retirement, and if your company offers a match, you are looking at an automatic return on your investment that is far greater than almost anything else you could put your money into (often 50% or 100%). However, when I have spoken with my colleagues, some mention that they just haven’t gotten around to it, some say they are enrolled and leave it at that, and others don’t even want to talk about it. Although it perplexes me, I can understand that maybe some of them don’t want to even think about retirement, but I still find it hard to believe that so many of them are missing out on an easy money making opportunity.

Although I am no longer surprised when someone does not have a savings account set up, I still wonder how people can say no when I ask if they’d like money to open an account. Of course, it’s not actually my money, but many online banks, including ING Direct, HSBC Direct, Emigrant Direct, and many others, all offer high interest rates and there is often a bonus for starting an account. They are easy to get started, and it is easy to set up a scheduled deposit, yet many people that can easily afford to save are unwilling to undergo a small bit of effort for a significant reward.

While there are many other ways to get free money (including signing up for some credit cards) so few people are ready and willing to take advantage of them. So take my advice, enroll in your 401k, and put some money in a high interest savings account. If you do nothing else to enhance your personal finance skills, you’ll thank yourself down the road when you see how the money grows.

Leave a Reply