Now that we might have fewer temptations, lesser opportunities and limited credit access, it is the right time to save! I am all for it. I have been in the mortgage service industry for over 24 years and I have seen a lot of savings account statements from all kinds of people from all walks of life. Trust me, my evaluation should mean something to you, that is why I am trying to expose this savings technique that is very simple and old school.
There are ways of saving money—from little to big --and ways to invest them. It doesn’t matter how much, what really counts is that you start today, regardless of how much you intend to save. Then once you have that thought in your mind and your spouse’s mind, you then look for a vehicle that will carry that savings and multiply that by maybe 2-3 times by the time you need it or by the time you retire.
Live for today or save for tomorrow might be hard to accomplish.
I have a friend named Jane (not her real name) who truly lives for today because the future is unknown. She thinks, “I may get hit by a bus, or get struck with a disease so why should I focus on saving?” But Jane isn’t stupid, she knows that there is also a chance that she may live to a ripe old age. So, Jane struggles with the question, “how do I reconcile these competing beliefs? I don’t want to live my life totally focused on the future, and miss out on the fun of today. But I also don’t want to live only in the present and have no money saved if I live a long life.” Consequently, Jane has some really great stuff -- a huge house, lots of beautiful furniture, but not much in the bank. Sounds like mostly people who might be in trouble now.
Now that she has all this stuff, the excitement of her purchases has worn off. A house is just a place to go home to, after the initial high of buying, showing it off and having late night parties with friends and family. You are now faced with large mortgage payments.
But, how does one reconcile the practicality of living in the moment with the fact that we all need some money for future emergencies and spending? Now, we are talking about Judy who is single and have no other responsibilities but herself. I know we all have family immediate and long distance family members we are helping.
For a lot of people who came here with nothing and now have good jobs and are doing well, they have to think about the possibility of something happening where they can no longer work. What if your family continuously needs financial assistance? I know we are all settled with the idea that we have to work forever, but really think about it! What if you can’t work forever and you are still alive!
So why am I telling you this? Because there is always the chance that you may run out of money, or lose the ability to make money. You can also rake up a lot debt without even really knowing it. I have seen too many hardworking people making good money but not being able to save for their future. Retiring at age 65, you should have a savings of at least six-figures to be able to survive with only your social security and retirement as income.
Your personal challenge is to find the best balance between spending now and saving for the future. Start simple and try saving 10% of your income. You can’t go wrong with saving 10%! And if you find that it’s too much or too little, you can always adjust.
Do not despair if you can’t save 10%; save as much as you can now, even if it’s just 2% of your income! In fact, it’s better to save something NOW, no matter how small an amount, rather than give up and save nothing.
Start a saving HABIT! The amount of money is less important than beginning the habit.
Action steps
- Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.
- Visit your personnel office at work and your bank. Follow their instructions to set up an automatic payroll transfer from your paycheck to your savings account.
- If you can’t transfer cash directly from your paycheck, then set up a regular automatic transfer from your checking to your savings account.
Beware of little expenses. A small leak will sink a great ship.” -Benjamin Franklin
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Please call and continue to send your inquiries in, appreciate your calls. Call Ken Go at (562)697-7028 or write to This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
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