Ready For That Rainy Day
You probably already know you need to save for a rainy day. Problem is, there doesn’t seem to be enough money to put aside for that rainy day. All of your money seems to be going for today’s needs – and you’ll just have to worry about the future when you get there.
Unfortunately, that is the financial equivalent of sticking your fingers in your ears and shouting “I can’t hear you!” Just because you don’t want to acknowledge that a savings account could literally save you doesn’t make it untrue. Job loss, unplanned pregnancies, car accidents, medical emergencies, transmission blowouts – they happen to all of us. Say it with me, “Something WILL happen.”
Right now, you might feel like you are stretched so far that you’re ready to give up before you’ve started. You might be paying off debts from years past, or borrowing just to get to the next payday. That does not mean you shouldn’t start putting a little bit aside. Forget about saving for retirement or your next vacation. Let’s figure out how to save for your next emergency.
Financial experts recommend saving 10% of your income. But unless you are in excellent financial health (and let’s be honest…you would have stopped reading by now if you were), this might look unattainable. So let’s start small. We’re going to take a teeny baby step and start a habit of saving. Let’s shoot for 1%. That’s right. Just 1%. How much is 1%? Look at your paystub. Then move the decimal point to the left 2 spaces. Try to put that much money aside every paycheck. Here’s an example:
- Tina makes $800.00 every paycheck. Now, Tina going to shift that decimal point over to the left by 2 spaces. How much is that? $8.00 every paycheck. If she gets paid every two weeks, that would be over $200.00 saved in one year! It is not a lot of money and will not shield her from life’s emergencies for very long, but it will help her get into the habit of setting a little bit aside every paycheck.
I challenge you to find that little bit of money every time you get paid or get a windfall (like a tax return). As you get into the habit of saving, up the percentage even more. Challenge yourself to find ways to save 2%, 5%, or 8% of your paycheck. You will start to feel a sense of control over your finances. And you’ll be a little more prepared the next time your car doesn’t start.
Joanna B. Says:
The New Frugality by Chris Farrell
Amazon Amazon Says:
From the personal finance correspondent for public radio's Marketplace Money, a new plan for a new economic reality_the philosophy and practice of living frugally. As a once-i more...
From the personal finance correspondent for public radio's Marketplace Money, a new plan for a new economic reality_the philosophy and practice of living frugally. As a once-in-a-lifetime downturn deepens, our go-go economy has become an uh-oh economy. But as trusted finance reporter Chris Farrell explains, there's a silver lining to this cloud: It is accelerating a trend already under way in America toward what he calls the New Frugality_a fresh way of thinking about how, what, and why we consume. In today's economy, a "sustainable" lifestyle isn't just one that's good for the planet_it's one that is based around core values and one that sustains your bank balance as well. In this friendly, approachable book, Farrell explains both the theory and the practice of living frugally. Frugality, he reminds us, does not mean old-fashioned penny-pinching. It means spending your money on quality rather than quantity_buying the best you can afford but the least you need. Drawing on his expertise as a financial reporter and his years of conversations with his public radio listeners, he provides down-to-earth, practical advice for every aspect of your financial life, including: • how to always maintain a "margin of safety" in your spending • the frugal home: renting vs. owning • the two best ways to save for college • wise debt vs. foolish debt • why giving your money away can be "newly frugal" The New Frugality amounts to a paradigm shift in the way we spend and save. The good news is, a frugal lifestyle is one of less waste, lower environmental impact, greater peace of mind, and, over the long run, deeper satisfaction. less...
Joanna B. Says:
Securing Your Future by Chris Smith
Amazon Amazon Says:
When it comes to personal finance, the rules may have changed, but the time-tested principles of sound personal financial management haven't. Those starting out on their paths more...
When it comes to personal finance, the rules may have changed, but the time-tested principles of sound personal financial management haven't. Those starting out on their paths to financial security just need to learn them better and apply them earlier than ever before - ideally, right from the start. Previous generations have had some help in achieving financial security that young people can't count on today: generous employer pensions, steady housing price increases, and a well-funded Social Security program, to name a few. In short, the old "muddle through" approach won't cut it anymore - not even close. A steady income is still a must, but parlaying this into long-term financial security is now an entirely different proposition than ever before. The institutions of the past can no longer be relied upon to handle the process; each person now needs to manage the long-term financial planning and decision making on their own.Fortunately, though, anyone just starting out can still achieve a very strong financial future from almost any income level - but only by doing the right things to make it happen. Those things aren't particularly hard to understand or to do, but it is important to do them right, to do them consistently, and to do them in the right order. Most importantly, if you get an early start, the risks are minimal and the payoff is substantial. But each year that passes, the risks go up and the payoff goes down. If you have just started out in your financial life, or if you are just about to, and you want a complete and practical education in the fundamentals of personal finance for a secure future, then this book is for you. Chris Smith guides readers through the basics of saving, investing, and financial planning in language that is clear, accessible, and lively, making difficult concepts understandable to the novice, and enjoyable to those who already have some understanding. He shows readers how to apply this knowledge, and to avoid the most common pitfalls, to insure the best possible outcome for long-term financial security. less...
Joanna B. Says:
How To Speak Money
Amazon Amazon Says:
An entertaining and indispensable guide to the language of finance and economics by the writer hailed for “explain[ing] complex stuff in a down-to-earth and witty style” ( more...
An entertaining and indispensable guide to the language of finance and economics by the writer hailed for “explain[ing] complex stuff in a down-to-earth and witty style” (The Economist).To those who don’t speak it, the language of money can seem impenetrable and its ideas too complex to grasp. In How to Speak Money, John Lanchester―author of the New York Times best-selling book on the financial crisis, I.O.U.―bridges the gap between the money people and the rest of us.With characteristic wit and candor, Lanchester reveals how the world of finance really works: from the terms and conditions of your personal checking account to the evasions of bankers appearing in front of Congress. As Lanchester writes, we need to understand what the money people are talking about so that those who speak the language don’t just write the rules for themselves.Lanchester explains more than 300 words and phrases from “AAA rating” and “amortization” to “yield curve” and “zombie bank.” He covers things we say or hear every day―such as GDP, the IMF, credit, debt, equity, and inflation―and explains how hedge funds work, what the World Bank does, and why the language of money has gotten so complicated. Along the way he draws on everything from John Maynard Keynes to the Wu-Tang Clan, Friedrich Hayek to Thomas Piketty, The Wealth of Nations to Game of Thrones.A primer, a polemic, and a reference book, How to Speak Money makes economics understandable to anyone. After all, “money,” as Lanchester writes, “is a lot like babies, and once you know the language, the rule is the same as that put forward by Dr. Spock: ‘Trust yourself. You know more than you think you do.’” less...