Q: Cheryl, How do I keep more of my money for me??
A: By saving. Plain and simple. How do you do that?? I suggest starting out with three different accounts:
We all want to be independently wealthy. With time, we can achieve this goal. It means putting aside at least 10% of your income for yourself and your family's financial security. Can't scrape together 10%?? I feel for you. Try starting with 5% or 3% AT FIRST and slowly build up to 10% or more. JUST START!! Even if you have to start with $0.50 in a sock, that's still $0.50 closer to financial freedom, than you were just a second ago.
When you've accumulated enough money into this account, consider investing this money into an IRA, an Individual Retirement Account. There's a little bit of magic to it. It's called compounded interest. You can learn all about this magic by checking out this nifty retirement calculator. IRAs are also really cool because they are tax-deferred, which means your money can grow, without having to pay taxes every year. You just pay the required taxes when you take the money out. There is a catch, however. You can't touch your money until you're 59.5 years old or you will end up paying a hefty 10% penalty on your money. Plus, you will have to pay taxes on it. In a way, that's good, so you can think twice before withdrawing your "Financial Independence" money.
Q: But what will I do in case of an emergency, Cheryl??
This is your "sleep well at night" account. Let's face it. S*** happens. We lose our jobs or get sick for a prolonged time. THIS DOESN'T HAVE TO BREAK YOU. Every paycheck, set aside a certain amount of money to help you when these things happen. Experts recommend that you have enough money to cover 3 to 6 months living expenses. Sound like a lot of money?? Sure it is, but it is SO important. Start small. Strive for one month, and keep saving. Money has a funny way of accumulating itself. When you have enough money, consider transferring your "Emergency Future" stash into a "Money Market Account." It has the benefits of being liquid and earning some interest (not a lot, though). Look into them at your bank or local credit union.
Damn!! A flat tire!! Where am I going to get the money for a new one?? This is a scenario that happens when you least expect it. What do you do?
I hope you picked "C." The "Emergency Now" account is for life's irritating little surprises. A flat tire, your microwave breaking down, et al. The procedure is the same as the "Emergency Future" account. Every paycheck, just set aside a certain amount of money for this important account. I can't tell you how good it feels not having to run to mommy or daddy whenever I need help.
A lot of you are probably thinking "Three Accounts??? Surely ye jest. That sounds like way too much money." Like I said before, start small. Even if you have to save $30.00 a month ($10.00 per account), at least you're on the right path!
Q: Ok, Cheryl, that sounds doable. Got anymore hot tips for me?
A: Of course I do. One of the ways you can keep more money, is to live within your means. We come to the subject of "credit cards."
A: Another way to hang on to your money is to know exactly where it's going. You do this by making a budget.
A: Another way to keep more of your money, is to become consumer savvy.
Q: Cheryl, this is starting to sound like you want me to be some kind of tightwad. Is that what you're suggesting?
A: Oh, hell no. I firmly believe that life is too short and should be enjoyed. If there is a special concert you want to go to, a weekend trip you want to take, or whatever, GO FOR IT!!! It doesn't hurt to bend the budget every once in a while. However, remember to PAY YOURSELF FIRST. Go to that concert, take that weekend trip, have fun!! Just remember your everyday responsibilities, like having to eat after you get back from that groovy weekend trip!
A: Another way to counteract that "tightwad" stereotype is to give generously to your favorite charity or house of worship.
I hope I provided you with some helpful information.
I wish for you PROSPERITY--in your financial affairs and in your life, as a whole!!