Billy Florence - Save Now! Don't Wait Until You Have "Extra Cash"
It is important to have a savings plan. It is so easy to spend everything we make and not set aside money for savings. One of the greatest financial principles is taught in the book The Richest Man In Babylon. It teaches to "pay yourself first." Most people say they will start saving money when they start making more money or when they have some extra money to save. But for many this never happens because there is always some place to "spend" our money.
There was a great article that talked about saving for retirement at CNNMoney.com. One of the key points in the article was teaching to create an automatic savings plan. This way the money is automatically saved each month before we can spend it. This fits perfectly with the principle of "pay yourself first."
Read some of the highlights from the CNNMoney article:
Let me get right to the heart of the matter. You say that you plan to contribute more to your IRA when you "have extra cash on hand." Sorry, but that's not much of a game plan.
Truth is, very few of us ever have what we would consider "extra" cash. There's always something to buy, like say a new computer system we can't do without or the latest IMAX size LCD TV-home-theater extravaganza.
Here's a better way to think about it. Put your savings plan on automatic pilot. By this, I mean you should set up some sort of a system where money automatically goes into savings and investment accounts on a regular basis, preferably monthly.
By adopting an automatic approach, saving becomes much like any other obligation you have, like making a mortgage payment or paying for utilities. Which makes sense. After all, at its most fundamental level, building a nest egg is nothing more than setting aside some of what you earn today so that it will be there during retirement. In other words, you're paying today for you retirement tomorrow.
One last thing: as your paycheck grows, it's a good idea to boost the amount you invest as well. This way, your savings will keep pace with your expanding income, increasing the odds that you'll be able to retire without having to seriously ratchet back your lifestyle.
To read the complete article, go to:
http://money.cnn.com/2006/07/28/pf/expert/expert.moneymag/index.htm
© 2006 Florence News reprint permission to Billy Florence Team Dream Chasers blog.
There was a great article that talked about saving for retirement at CNNMoney.com. One of the key points in the article was teaching to create an automatic savings plan. This way the money is automatically saved each month before we can spend it. This fits perfectly with the principle of "pay yourself first."
Read some of the highlights from the CNNMoney article:
Let me get right to the heart of the matter. You say that you plan to contribute more to your IRA when you "have extra cash on hand." Sorry, but that's not much of a game plan.
Truth is, very few of us ever have what we would consider "extra" cash. There's always something to buy, like say a new computer system we can't do without or the latest IMAX size LCD TV-home-theater extravaganza.
Here's a better way to think about it. Put your savings plan on automatic pilot. By this, I mean you should set up some sort of a system where money automatically goes into savings and investment accounts on a regular basis, preferably monthly.
By adopting an automatic approach, saving becomes much like any other obligation you have, like making a mortgage payment or paying for utilities. Which makes sense. After all, at its most fundamental level, building a nest egg is nothing more than setting aside some of what you earn today so that it will be there during retirement. In other words, you're paying today for you retirement tomorrow.
One last thing: as your paycheck grows, it's a good idea to boost the amount you invest as well. This way, your savings will keep pace with your expanding income, increasing the odds that you'll be able to retire without having to seriously ratchet back your lifestyle.
To read the complete article, go to:
http://money.cnn.com/2006/07/28/pf/expert/expert.moneymag/index.htm
© 2006 Florence News reprint permission to Billy Florence Team Dream Chasers blog.
posted by Billy Florence at
7:53 PM
