In a perfect world, a savings account would be established at the moment of birth. Unfortunately, many people preparing for retirement do not have a savings account. Of those who do, the majority do not have sufficient funds to cover living expenses.
Most Americans place establishing a savings account on their 'To Do' list, but fail to take action and set aside funds for their rainy day. Many young people starting out in life consider their piggy bank to be their savings account.
In today's economy it has never been more important to stash some cash. Setting aside as little as ten dollars per week can yield several thousand dollars over the course of 20 to 30 years. Financial experts such as Suze Orman and Dave Ramsey detail the necessity of saving money and remaining debt-free via their websites.
Both individuals recommend depositing a minimum of 10-percent of income into high yield savings or interest bearing accounts such as certificates of deposit or money market accounts. By establishing a savings routine, individuals can set accrue necessary funds to buy a house, start a business or pay for college tuition.
Many people claim they cannot afford to save money. However, this is rarely the case. Unless you are living below poverty level, chances are you have more income than you realize. In order to begin saving for the future it is important to gain a good picture of current finances. One of the best tools for reviewing monthly income and expenses is budgeting.
Budgeting can be accomplished by creating a list of all income and expenses. It is crucial to track daily expenses for a minimum of 30 days. People often spend money on things they really don't need. By writing down every penny spent, consumers can easily see where expenses can be reduced.
Many options exist for reducing expenses. Consumers can utilize grocery coupons to slash monthly food expenses. Preparing meals at home is much more affordable than dining at restaurants. Taking a brown bag lunch to work two or three days per week can easily slash expenses by $20 per week.
Individuals can sign-up for utility budget plans which allow consumers to pay about the same amount each month. Utility budget plans can be extremely beneficial during winter and summer months when utility costs can soar.
Homeowners whose mortgage payments carry a high interest rate should consider refinancing mortgages to reduce monthly payments. Mortgage refinance is a good option for borrowers who obtained mortgage loans for bad credit or those who took out home loans when interest rates were high.
Students with multiple college loans might qualify for student loan consolidation. By consolidating loans, graduates can obtain a reduced interest rate and lower monthly payment.
After tracking expenses for a month, consumers will have a better idea of how to realistically reduce expenses. All saved money should be placed in a high interest savings account and left alone. The longer money stays in a savings account, the more interest it will accrue.
Multiple savings account options exist. In addition to traditional banking methods, individuals can make their money work for them by investing in real estate or cash flow notes. We invite you to learn about savings accounts and investment opportunities by browsing our money management article library.
Failure to save can result in personal finance upheaval if emergencies arise. Not having sufficient funds for automobile repairs, medical care, or unexpected expenses causes unnecessary stress. Not having enough for retirement can cause emotional turmoil and place you at the mercy of government sponsored programs. Don't leave your future to chance. Take time to become educated about building personal wealth so you can live a happy, healthy, stress-free life!