Money is a necessity of life. This is why it is so important to manage your money wisely and start saving early. Making smart decisions now will prepare you for the future and will make your financial dreams come true.
Pay yourself first
If you wait to see what’s left over, you are less likely to save. Determine in advance how much money you plan to keep on deposit each month. If you receive a raise, increase the amount of money deposited into your savings account.
Take advantage of bank technology
Consider automatic payroll deductions or automatic transfer from checking to savings. Arrange to have a specific amount transferred to your savings account every pay period.
The key to a good budget is including as much information as you can, so that you can adequately prepare and plan. It’s important to keep accurate records of your spending so you’ll spot places where you can save money and know how much you can reasonably spend.
Ensuring your financial security in your older years requires planning, starting now, whatever your age.
You will need at least 70 percent of your pre-retirement income to maintain your standard of living when you stop working. People with relatively low incomes may need 90 percent. Social Security will probably pay you less than half of what you’ll need, so you must develop other sources of income to make up the difference.
Take the following steps to ensure that you’ll have an adequate retirement income when you need it:
. . . you must save some of the money you earn instead of spending it right away. The easiest way to save is to put an amount each month in a savings account as soon as you get paid and before you have a chance to spend it on something you don’t really need.
Think about this: If you set aside just $10 a week starting when you are 25 and put it in an account earning 4 percent compound interest, you will have saved about $2,800 by the time you are 30, about $16,000 at age 45, and about $40,000 at age 60. If you save more than $10 a week or earn more than 4 percent, you will save much more over time.