How Important is Savings?

3 minutes

Savings.

A simple word with a huge meaning. It is one of the hardest habits to establish in our financial life but arguably one of the most important. Because without savings we have nothing to utilize to help grow our money.

So how do we save money? I am sure you have heard this before but saving money is the most important thing you can do for your financial health. The first axiom of finance is to pay yourself first. Before you pay any bills and buy anything you must set aside money for your savings or investments. The rule is to save at least 10% of your take home pay every check. This may sound like a lot but it is an absolute must if you are going to establish any sort of saving plan with the goal to grow your money. Like anything you start small and grow towards your goal. I always say you can’t eat the whole pizza at once, as much as we would like to, but you need to eat it piece by piece. So if 10% is too much of a bite at first start at 5% and work your way up. You could do this gradually and as you increase it will feel less and less painful until you are at the 10%.

 

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How much do I need for retirement?

2 minutes

So how much do i need for retirement really? Part of the scariness or vagueness of that question is what makes people nervous about the actual answer. We are taught that retirement is a long ways off so who needs to really think about it and I will deal with it later.

One of the things that makes putting off retirement planning is that we don’t really know how much we are really going to need. The generally accepted number is:

One Million Dollars!

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