Rivermist - April 2012

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The Beacon

Volume 3, Issue 4

April 2012

BBBTips on Saving and Investing WHY Are Savings Important? Each of us could quickly think of several reasons why we don’t save more money. Excuses range from the routine (there’s nothing left at the end of the month…any extra money goes to pay off debt) to the philosophical (who knows what the future might bring…I can’t live my life worrying about finances). These excuses ignore two simple facts: personal savings are important and saving money is doable! Even the most modest savings account comes in handy for unexpected expenses, like car repairs or medical emergencies. Long-term, savings and investments can help us with major expenses, like buying a new house; pay for our children’s education; cover living expenses if we lose our jobs; and, provide financial security when we retire. It’s scary to think that most of us have only enough in personal savings to cover one or two lost paychecks. We all need to save money to boost our financial security and contribute to our financial independence. And, by taking small steps, anyone can build their savings. WHO Needs to Save? Everyone does! If you’re a child or teen, establishing a savings account teaches you that money can grow if carefully managed and invested. If you’re an adult, building savings is both a practical necessity (to cover emergency expenses) and a necessary practice (to meet long-term financial goals). Even if you are in your senior years, the savings habit should continue. Inflation doesn’t stop because you Copyright © 2012 Peel, Inc.

are getting older, and the cost of food, prescription drugs and other necessities keeps rising. WHEN Should I Begin Saving? It’s never too early to begin to save and it’s never too late. That means today is the perfect time to start! HOW Do I Begin? The best way to start saving is to play detective. Act like you’re trying to solve the mystery of “missed savings opportunities.” Gather the facts, look for clues, talk to eye witnesses, determine motives, outline potential solutions and forge a plan to carefully track your new savings goals. Gather the facts: Where are you going to get the money to put aside to save? You’ll have to gather information on how you currently spend the money that you bring in. Track your daily expenses for a week and then look at your once-a-month big expenses (rent or mortgage, car loan, credit card bills). Now mark each item with either an N for items that you Need or Necessities (rent, grocery bills, medicine, health insurance, gas) or a W for Want, those items that are luxuries or things that you want, not need (eating out, daily designer java, latest toys or technology gizmos). Talk to eye witnesses: If you’re single, you can skip this step. If you have a family, they are “eye witnesses” to overall spending habits. Your spouse or partner can help identify suspect spending habits and set saving goals. Remember, those who contribute ideas are more likely to be supportive, so be sure to work together to devise a spending plan you both can agree to. With kids, you can make it into a game. Suggest that if they are willing to make a sacrifice or two (give up a fast food meal for a The Beacon - April 2012

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