One of the words of wisdom imparted to me when I was very young is, “If you watch your pennies, the dollars will take care of themselves.”

There is great wisdom in this statement.  Why?  Because it determines our focus.  Whether you are saving or spending money, paying attention to the small denominations frames your thinking about how much you are saving or spending.

Here’s a quick example to illustrate my point:

If I told you that I would give you a penny today, and that I would double it every day for the next 31 days, would you be interested in the deal I was offering you?  Many people would say no because it’s just a penny.  However, if you accepted my offer, at the end of 31 days you would have $10,737,418.24.  If you don’t believe me, do the math yourself.

Get the point?  Watching both what you save and what you spend, even the minor transactions, is important.  As Benjamin Franklin once said, “There are two ways to become wealthy.  One is the make more money and the other is to spend less.  But the quickest way to build wealth is to do both at the same time.”

Watch your pennies, both saved and spent, and the dollars will indeed take care of themselves.