If you want to know what God thinks of money, just look at the people he gave it to.
Thursday, November 11, 2010
Money Saving Advice for the Working Man
Saving money is not as easy as it sounds. If a person wants to save money, the single most important money saving advice one can give a working man is to save for retirement. Statistics show that more than 70% of employees today have not saved enough to cover their retirement.
Only 15% will even have enough to qualify for retirement benefits as mandated by the Law. Saving money for a rainy day is an adage said and heard hundreds of times but never seems to be a possibility for many. Even with an extra job, many folks still don’t make enough money to save.
In the end, many workers end up working past retirement age in order to survive or end up in the streets. The single most important goal for every working man therefore, should be to save for retirement. This must be started at the earliest possible time.
To save money, it is important to work at making extra money. However, working at making more money is not the key. The key to making extra money is to work at cutting down on spending. Only by reducing expenses can one make that extra money to save away.
Working at reducing expenses could mean sacrificing some weekend splurges, hand-washing the clothes and doing the dish-washing in the sink. It could also mean using half the amount of toothpaste used every time, lowering the temperature in the water heater and furnace, and taking long walks in the park instead of long weekend drives.
Compute how much is spent on a weekend night out and compute how much money could be saved in the bank if you deposited some of that instead. Let us say that instead of spending $50 on a Friday night and another $50 on a Saturday night, one went out only once a week and deposited $50 in the bank instead.
That would easily amount to $200 a month. By depositing $200 a month for the next 40 years until retirement, a person will have saved a total of over $185,000 at a 3% interest rate compounded annually. That’s an extra $1000 a month for the next 18 years or so.
And that is based solely on saving on weekend binges. If one lived a sensibly frugal life and put away $400 a month, simply doubling the earlier figure will compute to $370,000. Not bad for a nest egg. The idea is not to save money for the short term – to buy a car or house, but to save enough for retirement.
There are several reasons for this. One is that saving money for the short term means wanting to save a lot at the shortest possible time and then dipping into the savings every now and then. Another is that there are also many ways to buy a car or house, but only one way to save for retirement. For instance, the company could give an employee a car plan or a housing plan.
A retirement plan on the other hand, means saving for it. A short term goal also negates the advantage that one gets out of bank interest rates. Therefore a short term goal is not one must strive for in saving money. Work at saving money for retirement – that is the most sensible money saving advice a working man will ever get.
You can use all these strategies to save money, reduce debt and improve your life but it will not last unless you have a system automatically set up to continually work without your input. Get Dan Cavalli’s FREE money saving secrets set on auto pilot at: www.the-richest-man-in-babylon.com