Talking Cents #2: Time Value Of Money.

The Chi.
June 5, 2015
Lobster and A Bone To Pick.
June 10, 2015

Talking Cents #2: Time Value Of Money.


savings jarIt was particularly chilly this morning. Slogging through rain and mud wasn’t a hoot. Neither was going across town to attend my second Centonomy class in that weather. Grim prospects those were.

Lest you dismiss me for another snooty urbanite, I should point out that I got there just in time to catch the show. Time Value of Money.

The classes started a week ago and have been real ball-busters, to put it mildly. Lesson #1 was all about tracking my money well enough to know where each coin was going. This gave me pause. The idea that I could cut back on some frivolities to achieve a long term fulfillment was something I had not considered doing.

Taking its literal meaning ‘time value’ indicates that time is on the constant move. You won’t wait for three years to finish settling your Helb loan so that you can start saving in earnest. Money which accumulates to become huge sums starts with that first coin in. Because the savings should start early enough when the pinch can hardly be felt.

Start with that twenty shillings daily, in half a year you will have saved up about three thousand seven hundred. The money that would otherwise have been spent buying roasted maize on the side of the road or a weeks’ supply of gum and KitKats’.

Then came inflation, present value, discounting, compounding and a host of other finance terminologies that floated about for along while. My eyes and I can bet a few more others glazed over. Interesting how money is only fun when you’re talking of ways to spend it.

It was time to crunch numbers and figure out what was the advantage of a compound interest over simple interest. What a long term savings goal would look like when back tracked to the present. Some had many zeroes to them meaning the owner of those particular dreams would have to bust their tail for them.

Okay, back to the summary. What the time value of money emphasizes on is the advantage of an early start. This is being able to start with twenty shillings one day and being able to add on to it as days go by because there’s no small sum when saving. Clean that jar and start that savings initiative: you, you and you.

Ka-ching* should definitely be a sound you love to hear.





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