Of course, we could throw on the fire saving for retirement and college savings for the children. Well, it is easy to see why so many families get off track and overwhelmed by the thought of something as sexy as saving money. (When is the last time you saw a hot TV show on one of the networks or a major movie about saving and investing money?).
Here’s the bottom line: We recommend that you forget about all that competing information.
Think only about percentages.
Start with your next paycheck. Your after-tax income is what we will call 100%. Of course, if you are not already enrolled in your company 401k and a Roth or Traditional IRA (both), you will have to settle on a small amount for each of those before we begin). That’s right – we believe slow and steady wins the race. So, if you have to begin with a small amount for your 401k and your Roth or Traditional IRA, so be it! Do it. Remember: 401k and IRA money is about long time horizon. This is money you are kissing away for when you are old. Do it. Don’t skip that important step.
Now, let’s look at that after-tax paycheck.
Take your total after-tax paycheck and multiply it by .01.
Take that amount of money and move it to actual savings (away from checking; “checking accounts are money laundering accounts for other people’s money”). It is important that you do this BEFORE you pay any other bill or use any money from your paycheck.
Be honest. Can you spare 1% of your after-tax income in your next paycheck for savings?
Most people can do that. If you can’t spare one percent , you have some other work to do.
Each paycheck after the first one, you will add an additional .01 and multiply by that number (so the second is multiplied by .02, the third is multiplied by .03) until you reach .20. This is how you can move your regular and steady savings from 0 to 20% of your after-tax income without killing your lifestyle.
This is just one way to adjust your savings upward and create a force for saving that will overtime become money that will work for you and your family to give you options and help generate investing that will help your family long-term.
This is the way to create and earn real financial freedom for your family. Help them build wealth and protect themselves long-term. You will be glad you did.
ONE HOUR A WEEK
Busy? Everyone is busy, right? However, you can and should map out an hour each week to work on ideas for saving and boosting savings opportunities. This is a family activity. If you engage your kids and your spouse in regular savings competition, they will develop excellent habits that will help them all of their lives.
When we were little, our parents probably thought they were doing us all a favor by shielding us from the realities of personal finance. Don’t you do it! Teach your kids by example and you will make them richer over the course of their life and give them more potential control over their future.
HELPING YOUR KIDS GET AHEAD
If you think I was born saving money, you are wrong. My family is filled with hillbillies from Louisiana. There are members of my family that don’t believe in 401ks or IRAs. I was not brought up to save and invest regularly and I have made every mistake you can think about when it comes to money. I have had to learn the absolute hard way how to get savings on track and make it a part of your life without killing your lifestyle. I have had to learn the hard way how companies mislead with marketing. It is my mission to share what I have learned about regularly saving with my own children and also share it with you. That’s why we have a lot of “free” (blogs like http://www.boostmywealth.wordpress.com and http://www.stickyasset.com/blog and groups on Facebook like “Coupons & Coupon Codes”)!
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!
Connect with us on Facebook with these free groups:
“Coupons & Coupon Codes”
“Live The Lifestyle Your Family Deserves”