It goes without doubt that money is the most common item that can be known by even a three year old. Surprising it is the most mismanaged item. While most people are busy looking for money, whether it’s being paid for chores at age 5 or entering the workforce.
But even such an answer is still wanting. Saving can be done at any age as long as one is earning something. A school going child can also save part of his pocket money. A good foundation for financial literacy should be started right from school days when parents and teachers help to teach the young ones how to manage money.
Planning for your finances is the shortest route to wealth creation and sustainability. Considering two families with the same income, a family with a financial plan saves about twice as much as that which does not have one. The easiest way to save money is to have a set amount automatically deposited into your bank account each pay period.
There are people who think that saving can only be done when we reach a certain income-level; when we have earned enough to be able to save some. This brings us to another question: How much is enough. Practically speaking there is never enough. The global consumerism malady never leaves anything for us to save. Our bulging expenditures range from necessities to luxuries. We may be slightly less intent on supersizing our homes, but our hunger for luxuries and fast food as well as spending on them continues to grow.
In today’s monetary society people are allured into falling prey for any gimmick. Most consumers are impulse buyers; they will buy anything that appears attractive even when they never had the intention in the first place. Consumers are most tempted by buy one, get one free deals, specific discounts or percentage off deals, persuasive displays and advertisement and so on.
Save for emergency funds: It is important to have an emergency fund set aside to cover unexpected expenses. This could cover an unexpected car repair, your emergency appendectomy or a sudden job loss. Ideally your emergency fund should be about three to six months of your expenses. If you are just starting out you should put aside at least $1000.00 for this. In addition to your emergency fund you need to make sure you have a plan and good insurance in place to help you survive the unexpected financial events in your life.
As long as we know why we have to save the saving culture can easily be developed. Putting some money away regularly is the best way of saving up for expensive things, like a holiday, car, or a wedding. It can also be a good way of making sure you have money to pay for emergencies such as needing to replace an expensive household item, a car or medical care. Saving enables you to acquire items by cash payment. You are likely to receive better interest rates, and be able to afford an expensive item.
Retirement has always been another great reason why we have to save. When age comes looking for his bride you can’t hide. A man who will sit under a beautiful tree in his old age plants it now. The sooner you start saving for retirement, the less you will have to save in the future. You can put your money to work for you. As you continue to contribute overtime you will be earning more interest on the money you have, then you put in each month.
The most common way to save for retirement is with a pension, but you can also invest your money in other ways to save for the future. The biggest mistake most savers make is saving money for future expenditures. Money should be saved for investment. That’s the only way money can yield more money and bail your self from further saving. We have seen people who save money from January to December with the hope of spending it on Christmas holiday. This is wrong; money saved should be invested.