Money Saving Expert: Can You Become One?You bet! Being a money saving expert may seem hard to do, but here is the solution: Pay yourself first!, and 10% even today, is still a good rule of thumb. If you have a dollar and lose a dime, it's not the end of the world. Reducing your thinking to that level makes it more manageable. Let me tell you a story: When I started my first job at the age of 16, my mother told me to save 10 cents out of every dollar I earned, and do it before making any other plans.I felt really grown up and took her advice to heart. By the end of that Summer I had saved 126 dollars. Well, fast forward to today, 30 years later, without adding another cent to it, my 126 dollars has grown to $4,600! A key aspect of being a money saving expert is to start NOW. In ten years, you don't want to be in the same financial position than you are today!. You don't need millions to make millions all you need is to start TODAY with WHATEVER you have! But how do you save regularly?You get it, you are ready to start! But wait: a little voice in the back of your head is telling you that despite all good intentions, once the money is in your account, it will be irresistible not to spend it! No Doubt. The answer is simple: Direct deposit. Set it and forget it! The money goes into your saving, investment or 401k account BEFORE you receive your paycheck. If it's not there, you can't spend it. Is that all you ask? Not quite! You need to have a map for your savings. An Emergency Fund is the first order of the day: It's your reserve in the event of an unforeseen problem like a serious illness, job loss or major home repair. Six months to a year worth of salary is the amount to aim for. This money by definition needs to be liquid and easily accessible. A Savings account or Money market account would be the ideal choices for it. Next comes your short-term savings.This is to extricate yourself from and/or avoid the lure of credit card debts: this is money you save for Christmas gifts, vacations, your next i-phone or computer. You could place it in a money market fund or short term CD for slightly better yields. Last but not least, the really long-term but expensive items in your life: House down payments, College funds, Cars, Retirement. This latest group will need the funds "invested"(we'll address this later) rather than just "saved". In general, not being immediate needs, they can be positioned to provide better returns over time. Would you like to Turbo-Charge your savings? Imagine you get an unexpected bonus, a great tax refund or even a surprise birthday gift from Aunt Jane!
What to do? What to do? I say put at least 60% in savings and spend the rest whichever way you want! (Life is made for living! this way, you'll never feel deprived and will stick to the program all the more!)
Saving money everyday: We can always improve and reach our goals earlier.
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