Should you save money for a rainy day?

It’s beginning to sound depressing that you may not even want to go through this very important step in planning for your future.But, if you’re really serious, you CAN do something about it.If, after you have defined your goal, you will discover that you have a problem because you don’t know how to ever achieve it, then be consoled in the old adage that says, a problem defined is a problem half solved.

The first step is to face the future squarely and define the challenge: decide what your goal is first and then make a plan.Your goal will not happen just because you defined it.But neither will an investment plan work, if you have no goal to begin with.So, take the time to plan your goals.Dream a dream, if you want to.But do it.Now. Sticking a wad of cash under your mattress may sound like solid advice your great-grandmother gave you, but unless you're getting a healthy return on your investment, it's a poor personal financial choice. One of the oldest rules of personal finance is the simple admonition to pay yourself first. All the money books tell you to do it. All the personal finance blogs say it, too. Even your parents have given you the same advice.

Should you save money for a rainy day? Yes! But instead of hiding it in your home (or even sticking it in a bank account without some deeper analysis of the interest rates), you're doing yourself a disservice and turning down money that is rightfully yours! To pay yourself first means simply this: Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account. The first bill you pay each month should be to yourself. This habit, developed early, can help you build tremendous wealth. If you’re just getting started in the Real World, saving may seem impossible. You have rent, a car payment, groceries, and maybe student loans. Sure, you’d like to save, but there’s just no money left at the end of the month. And that’s the problem: Most people save what’s left over — left over after bills and after discretionary spending.But if you don’t develop the saving habit now, there are always going to be reasons to delay: you need dental work, you want to go to Mexico with your friends, you aren’t making enough to pay your bills. Start saving now instead of waiting until next year (or the year after)

Read more...

Budgeting and Saving Your Money for the Future

Budgeting and saving your money for the future aren't the only things you should think about when it comes to your finances. I think the key is setting up a system so that the saving occurs automatically. If putting money away depends on you sitting down each month and writing out a check to your savings account or mutual fund, it may not happen. There will always be some pressing demand preventing you from saving -- an unexpected bill, expenses you didn't foresee, an extravagance you decided to fund "just this once." There are three basic reasons why most people fail to save and invest for their future; lack of know-how, lack of discipline, and lack of resources.
The first one should be easy enough for you to solve, the second may be tougher, and the third might seem impossible to hurdle at the present time. Nevertheless, if you put your mind to it, there is no reason why you can not hurdle all of them. Whichever route you take, the key is making sure that the money actually gets saved or invest. Good intentions aren't enough. You've got to follow through.

Read more...