I often find myself getting my paycheck and pretty much having nothing left over from it. It’s like I have already spent everything. I mean, with my subscriptions, bills, and planned activity or two, there is nothing left to save. I found this article from Cheaplee that talks about how we create a financial bubble in our life, and how we can save successfully.
If we get a raise or lose our job we increase or decrease our spending accordingly to fit inside the bubble. I agree with the article in that we need to include a savings element, as in an investment portfolio, into our bubble, so we can have a more sound financial future. The article entitled 6 Essential Elements for Successful Savings really goes into depth of ways to protect your future. I thought this article was super important and because of the amount of information I decided to cut it into two parts. Plus everyone is not as smart and sophisticated as George and maybe couldn’t handle all that information at once. Part I of II, describes the first three steps.
1. Start with a basic retirement account- It’s a good idea to start with your company retirement plan, if you have one. If your employer doesn’t have one, find out other options through a broker of some sort. “By starting investments your account could produce significant returns which will allow you to realize your life goals”. I’m hoping it will give me enough money to open a candy factory and buy some umpa lumpas.
2. Pay off all credit cards- The last thing you need in these difficult economic times is to go into more debt. When investing, it doesn’t make any sense of receiving 10% back on your investments but paying 17% on your credit card. As well, worst-case scenario you lose your job, you have your credit card bill knocking at your door and building up even more interest. They even say not having debt has its psychological benefits in that it creates less stress knowing you don’t have your credit company breathing down your neck. I find they are quite smart too because if you use it a lot, they will raise your maximum so you can build up even more debt. Hmmm…
3. Have a separate emergency savings account- Many experts advise you have 3-6 months of salary saved up incase of any financial difficulty of jobless. Sometimes it’s more practical and feasible to have a savings budget of only the necessities and cut out all those trips to the casino or spa. Damn, I’m going to miss those massages and pedicures. It’s always nice to open it with another bank, with automatic installments per month, so we don’t get tempted to use it as often as our general bank account.
Hopefully these tips can help you start to save not only for better economic times, but also for when you’re old and gray. What are you doing to protect your future financial stability during the recession? Check back tomorrow at the same time for the other three tips on protecting your future. And who knows, invest properly and you may be the only one in your nursing home with a king size bed and a 40-inch LCD.
Just kidding, but seriously.
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Tags: Cheaplee, Investing, Recession, Savings, Screw You Recession, Thaddeus Bolton
