How To Start Saving

How to start saving… 

When we start out working most of us begin with student loan debt, a car that needs to be replaced or a car with a loan payment.  Most of us are renting and struggling to pay for the necessities of daily life. 

A lot of times, the habits that we develop in the beginning of our working career carry over into mid-life.  We begin with struggle and many of us continue with struggle.  We are all trying to take care of our families and grow our net worth, but some of us fail to look directly at our habits and where they are taking us. 

If your savings goal is less than optimal, try a few basic concepts to see if they might work for you.  Most of us get a raise most years.  Try saving half of the raise.  Build a 6–18-month emergency fund in a high interest cash account and then focus on pre- tax savings first and then save in after tax accounts. 

You will be able to save more if you forego the Roth option.  When we begin, and before we have enough, the most effective saving is to maximize every option.  Take advantage of tax deferment and employer matches.  Make sure to invest bonuses and family gifts rather than making them part of your lifestyle.  Credit card points are free money as long as you never carry a balance. 

Hard times come for all of us through our adult lives, and having a reserve to fall back on makes the sacrifice of saving easier.  Plan to work your way up to saving 15-25% of your earnings and retirement will be a stress-free celebration of a life well planned. 

If you pay yourself first, you create habits that will give you the practical wisdom to navigate through job changes, business struggles, college educations, and anything else life throws at you.  Money is not everything, but it makes most things easier.