Are you making the most of your money each month?
Saving money is the most important action you can ever take in order to lay the foundation for a will be the most important thing you can do this year to start planning for a better financial future for you and your family.
Even though there are have been signs of recovery from the deep recession that started in 2008, the truth is that there is still a long way to go before things start looking rosy once more. You may not have any control over the world economy, but you do have control over the way you spend, save and invest.
Spending money is unavoidable in some cases. We need to to pay rent or a mortgage, eat, travel to and from work or school, use the computer and use electricity. We have to heat our homes in winter and cool them in summer, and we need clothes and shoes. But why pay more if you do not have to? And why cram cupboards and closets with dozens of items, and be in debt to the credit card companies, when you could save the money, and even make it go to work for you in the form of investments.
From essentials like your rent or mortgage and utilities, to food, car payments and insurance, you can save on almost everything you need to buy, and put those savings into an emergency fund. The emergency fund can represent three to six months of living expenses in case the unthinkable ever happened and you lost your job. It can also be for things like a medical emergency for yourself or a pet, and so on.
The more savings you have, the better. Having said that, there IS actually such a thing as too much cash. Why? Two reasons. If you are saving, but still have balances on any credit cards that you are carrying over from month to month, the amount you are spending on interest will be a lot more than what you are earning in low interest rate savings accounts.
The second reason is because savings accounts pay so little, they often do not keep up with inflation. The only way to beat it is to put your savings over what you need for a fully funded emergency fund into investments. In this way, your money will start working harder for you. in order to lay the foundation for a more secure financial future.
No matter how much money you earn, saving and investing are the two best ways to make your money go to work for you, not just you working all the time for your money. By putting extra savings into investments like a 401k or a 529 account, you will soon be able to start to meet all of your financial goals: a comfortable retirement, great college educations for the children, buying your own home, and more.
If you are tired of the financial doom and gloom, or constantly feeling as though you are struggling to make ends meet, rein in your spending, start saving, and see what a difference it can make to your bank balance. Use some of your savings to earn more for you through wise investing, and you will soon be on the road to a life with less financial stress and more financial satisfaction.
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