You hear it all the time - "Pay yourself first." This is a great principle. It is important that you take some of what you earn and put it away for the future. A family that is prepared financially is a happier family. A good amount to save is at least 10 percent. If you don't have any unexpected expenses and you are successful in saving 10% of what you earn, you will have a year's salary in the bank in 10 years. Actually, you will probably have more than that because you will be receiving compound interest on your savings. Ten years may seem like a long time but it will pass before you know it.
There are several reasons to make sure that you are saving some of your income.
It gives you some security and calms your mind.
It teaches you thrift and to be careful with your assets.
It gives you something to fall back on if something unplanned goes wrong.
It looks good for your credit rating to have some cash on hand.
It is essential for your planned future purchases like college, home, etc.
It makes you the go to guy if anyone in the family needs some money. (OK maybe there are really just five good reasons.)
Can anyone say broken freezer? When we moved into our second home, we put all of our frozen goods into the freezer. We plugged it in and went about moving everything else. Two months later I went to get something out of the freezer and everything in it was ruined. The plug that we plugged it into was not a working plug. It not only ruined the food but the freezer never did recover. We had to buy a new one with our savings. I am very glad it was there. It would be easy for a situation like this to cause major problems with the family budget.
There are lots of ways to save. I have a money jar by my night stand that I put my change in every night. It is not a replacement for a real savings program but when it is full, I take it to the bank and normally receive between $75 and $125. Of course it takes months to fill but it is fun to take it to the bank. A far better way to save is to put 10 percentÂ of your paycheck immediately into your savings account. Don't think about it: just do it - you will be surprised how quickly it grows.
Don't get into your savings account on a whim for some Girl Scout cookies or the like. Make sure you have a legitimate reason before spending your hard earned savings dollars.