Natalija told me in a comment this morning to post something cool lol! Not sure how “cool” this is, but she did mention owning my own business and free time which makes me think of money. Well when I think of money I think of not having enough! So what better way to get more than to save! I get a weekly email from the Feed The Pig website and the topic of this week is “You Can Save”.
Saving is probably one of the hardest disciplines to master, but it is a necessity. It is the bare minimum on the path to financial freedom and it doesn’t hurt to have backup in case of job loss and an emergency. The books and articles that I have read recommend 4-6 months of your expenses in your savings account and about half of that in another account for immediate emergencies. The thought being that if you become sick or loose your job you can survive for 4-6 months without trouble. The other account is for true emergencies. And not the ones that involve a triple chocolate shake from TCBY. The kind where if you don’t get the car fixed you can’t work or to pay medical bills.
So you might ask “Where do I start?”, do what David Bach (The Automatic Millionaire) and others say. Pay yourself first. It’s not that hard when you know how. Here are a few tips on how to pay yourself first:
- Pay as much into a retirement account as is allowed (or offered) by your employer.
- Have automatic payments removed from your paycheck into a savings account
- Automate any other payments and withdraws into savings as possible (that make sense of course)
- Cut out something you do everyday (ie Starbucks $5 drink) and put it in savings. This is called the Latte Factor by David Bach
The more you can automate the better of you will be, but just pay yourself before you pay the bills, mortgage, rent, etc. Start small and build up. Take the “Latte Factor” seriously and you can increase your savings today!