Budget Planning
SAVING, What's That?
An estimated seventy-five percent of families will experience a major financial setback in any given ten-year period. The economy and the job market are good now, but that could change. It's smart to be prepared for financial thunderstorms. A consistent, long-term saving program can help you achieve your goals. It also can help you build a financial safety net. Experts recommend that you save from three to six months worth of living expenses for emergencies.
What you don't see, you don't spend
Saving means giving up something now, so you will have more in the future. It's not easy deferring or eliminating purchasing things you want today. It helps to pay yourself first. Take a portion of savings from every paycheck before you pay any bills. Use your company's payroll deduction plan if available. Arrange for a fixed amount to be taken out so that you never see it. What you don't see, you don't spend. You also can direct automatic checking account withdrawals into a savings account or money market..
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| The Nasty "B" Word (Budget) |
| Making a Game Plan |
| Saving Tips |
| Good Money Moves |
| Bad Money Moves |
Excusses for Not Saving Money
Excuse No. 1: I don't make enough. One reason many people don't think they have enough to save is because they don't know where their money is going or how much money they're spending on items they don't need. Once you find out what you're spending money on that you don't need, you'll realize it's all money you can be saving.
Excuse No. 2: I'll get around to it later. People who put off saving and investing also don't get the benefit of time, which is one of the greatest factors in successful wealth accumulation.
Excuse No. 3: I deserve a little luxury in my life. The purpose of having a healthy savings plan is not to deny yourself the pleasure of buying things you like today. Not only should you be saving for retirement and emergencies, but you should also reward yourself by saving for things you'll want to splurge on sometimes.
Excuse No. 4: Someone else will take care of it. While this is more likely to be the excuse of a spouse waiting for the other to bring home the bacon, anyone can fall into the trap of putting the savings responsibility onto someone else. Counting on an inheritance to kick in or even entertaining serious hopes of enjoying the fruits of gambling or lottery winnings are forms of this excuse.
Excuse No. 5: I'm saving through my 401(k). Yes, it's crucial to save as much as possible for retirement, but if you don't have additional savings for emergencies and life's occasional luxuries, you're going to end up having to dig yourself out of debt. A savings plan should have a multilayered approach: Savings should be allotted for retirement, emergencies and the evolving needs of life.
Excuse No. 6: This item or service will pay for itself. One of the main reasons people give for blowing their savings is because they're buying intangibles that are worth more than money over time. While there are some items that fall into this category, such as an education, it's easy to rationalize that something is worth more than it is.