How did they do in during The Great Depression? How did they raise much larger families? How did they “get through?”
So much of our culture is about getting rich overnight or becoming famous. Most will never do either. Our blog isn’t about becoming wealthy. It is about the simple fact that you can develop your own plan to save more money with your existing bills and on your existing income (or you can find ways to add to your income specifically for the purpose of raising savings levels and investing levels on a regular basis).
Over the last sixty plus years the “American Dream” has been about owning a home and saving for retirement. Sometimes that dream can be overwhelming. This blog is about taking the overwhelming and putting in the baby steps that make you confident you can do well and manage a mortgage long-term as well as save regularly.
The first stop to establishing your “ground game” for saving more is to look at expenses. This can and should include all regular bills and what we call irregular spending. That means the money you might drop on Starbucks (sorry) or in the line purchasing groceries (you know the candy, magazines and other impulse purchases).
Every expense should have a moment under the spotlight. If you are not already saving 10 – 15% of your after tax income, you should set a goal of 15 – 20% of your after tax income by reducing spending. Even the hardest regular bill you have should face pressure. That means that you should call each company that sends you a bill and ask for a reduction. Talk to supervisors. Tell them that you are in financial trouble and want to stay a customer. Be patient and be open-minded to their suggestions. After all, you are looking to trim your expenses so you can begin a regular savings program.
Of course, you should be participating in your company 401k plan (if you have one).
Of course, you should be looking for opportunity to push money from checking to savings. If you read this blog over time, you know we say “a checking account is a money laundering account for other people’s money.” Use any excuse you can to push any extra money from your checking to savings. If you do that single thing over time, you will be surprised how much money you can save.
It is our belief that you should work to establish a regular and automatic savings program that leads to the correct emergency savings for 2010. That doesn’t mean 3 to 6 months of expenses in savings. It means 15 to 18 months of expenses in money market savings and certificates of deposit. It will build faster than you think. It will separate you from the moment by moment rat race of negative things that can happen to get in the way of your own path of saving and investing. You can do this.
Spending time reading blogs such as this one and reaching out to learn about extra ways to make money for the purpose of saving extra money and investing regularly can give you an edge over other savers. It can help lift your family.
You can avoid a future financial crisis or even the very temporary things that happen to everyone (like when your car needs a new tire or something happens that requires immediate money you may have been saving for something else. You know the “something-always-gets-in-the-way unexpected” problems that pop up in life.
HELPING YOUR KIDS GET AHEAD
In this country we don’t do enough to teach our children about money, managing money, saving regularly (and automatically), compound interest and steady investing for a long-term future. As a parent, we are always concerned that they get a good education and go to a good college so they can make a lot of money or have a valued career path. The truth is that we could do our children the biggest favor and one of the best things by sharing with them sound saving and investing principles.
You can join our free Facebook group (or have your children do it, too) by searching in the Facebook bar on your “wall” for “Live The Lifestyle Your Family Deserves.” Click on “become a fan.” It’s free and it ties our free blogs into that group.
If you want to give your children the same information we are giving ours, you can purchase the only thing we sell on any of our blogs or groups. It’s called “How To Survive Any Financial Crisis” and you can get it for only $4.95 at http://www.middleclassmoney.com.
Thank you for reading our blog and good luck!