How committed are you?

Let's call a spade a spade. There are lots of people who say they want to save, but don't have the tenacity to stick it out. They're what I call Saving Wussies. Lots of talk, no action. Lots of whining about how hard life is, no commitment to doing WHATEVER it takes to make savings a reality. And then there are the people, the Saving Demons, who won't spend a penny that's not in the budget because they are hell-bent on getting to their goal. Do you know what you are?

Not at all committed
You love to shop. You can't save a penny. You think you should. Or you know you should. Or you wish you could. But you're not going to suffer one minute of discomfort. You're never going to delay your gratification or say no to yourself. Nope. Money is for spending, and that's what you keep doing. You know what? It's your money. Spend it all. Just remember you can't go whining to your friends, family, me, when the caca hits the fan and you don't have two red cents to rub together.

Since you're not at all committed to saving, you're going to want to get at your money whenever the whim takes your fancy. You should keep it very handy. Of course, you could help your case of "got-it-spend-it" by locking your savings up so you just can't get at them. But if you're hell-bent on spending your money, admit it and don't do anything to incur penalties when you decide to take the money out. Stick with: a high-yield savings accounts, 30-day or 60-day term deposits, a money market mutual fund.

Somewhat committed
Okay, you've been told you should be saving and you think that it's probably a good idea. It's just that stuff keeps cropping up FORCING you to spend your savings. The car breaks down, your son's hockey fees come due, your daughter needs a dress for the dance, your husband wants a new TV, your wife is desperate to redo the kitchen. The list goes on and on and on. You squirrel away a few bucks and then, BAM, something knocks the money out of the savings account and into your pocket. Oooops!

You need to keep some money accessible for emergencies, but you would definitely benefit from locking the rest up where temptation can't steal it. Think: 3 to 5-year GICs and government bonds. You should use anything too liquid (i.e., easy to sell) because the temptation will be to cash out and spend the money.

Very committed
Okay, you get it. You're determined to save. You may not have a lot to start with, but that's not going to stop you. You've set up an automatic debit from your chequing account to a savings account somewhere that makes it very hard for you to get to the money. And every six months, you increase the amount you're saving by 10%, 15% or 20%, so you keep growing your savings. You're learning all about retirement savings plans, and you're determined to take full advantage of the tax savings they offer. Ditto educational savings accounts, and whatever else will help you reach your goals.

As far as choosing investments goes, you're in the same boat at Passionately committed, so move on down.

Passionately committed
You're so committed to reaching your goal that you've actually taken an extra job and are directing all the money you're making from that job to your savings. You're a fiend when it comes to using coupons, shopping on sale, cutting corners. And every penny you "save" using coupons, shopping on sale, or cutting corners, goes immediately into your savings account. Yup, you don't save $10 without applying that $10 to your savings! Whoohoo. You're a train and everyone better get out of your way, because you are determined to have your goal.

Whether you're very committed, or passionately committed, your investment options are wide open, and should only be tempered by the knowledge and investment time frame.

Knowledge you get, right? If you can explain the investment to your sister, mother, best-friend, brother, and still want to buy it, go ahead.

Which brings me to time horizon.

Oh, darn, I see we've run out of time!