Back To Basics, Saving Money

We have been told to save money. Unfortunately many of us do not heed that advice. For many people saving money is difficult. Still for others it is impossible. So what if you decide to save money , but you don’t have any money to save? The fix for some could be as easy as purposing yourself to save money. Other may require more creative measures. Here are some steps that may help you. Many people found out the hard way the last two years or so how awful a rainy day can be. Protecting yourself from that dilemma is why you should be saving money with every paycheck

Paying Yourself First

Paying yourself first is a foundational principle to saving money. We all think about paying our mortgages, making that car payment or trying to pay down those dreaded credit cards. Before you write the first check or make the first online payment, pay yourself.  How much or where you put that money is negotiable. Paying yourself first is not. Making that payment in the form of an automatic deduction for a online savings account will make it easier.

Compartmentalize Your Money

As a youngster I was told to save money for different things I wanted to needed in brown paper sacks. Seems strange I know, but you would do worse that opening different accounts for the various expenses that you will incur. Examples include, car payments, insurance premiums, or perhaps a new set of kitchen appliances. The point is save the money by compartment or department and keep you hands off.

Protect Your Savings From Yourself

Once your compartments begin to accumulate resources the temptation to rob the bank will surface.  This is where you will need to have an accountability system built into you savings habits. Remember for the most part these are rainy day funds and unless sit is raining you would be better off to leave your accounts alone. Little things like requiring two signatures for withdrawal, or waiting a few days before the money is transferred to another account may ease the temptation.

Written by on September 14th, 2009 with no comments.
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Find A Safe Place To Keep Cash

Gone are the days of investing every available dollar you have into every available investing vehicle. Times like these call for a measure of cash reserves. So where is the safest place to keep your cash, while waiting for the markets and the economy to turn around?

The safest place to keep your cash in still a bank deposit backed by the Federal Deposit Insurers Corporation or the FDIC. The FDIC  insures savings, checking, and money markets deposit accounts, and CDs

While saving accounts offer the most flexibility, don’t expect to break the bank with interest perks. However you do have the freedom of withdrawing your money at any time. This is an important component for many people.

Getting the best cd rates is not all that difficult, but you might pay a penalty if you need to take the money before the fixed term is up. Many banks are hungry for new deposits and are extremely competitive with cd rates. Remember as long as the account is FDIC insured, the bank offering the cd matters less than the interest rates it is paying. You’re looking for safety.

Alternatively while money market funds are not FDIC insured and carry a measure of risk on their own, many investors are committing a portion of their cash portfolios to these funds. Money market funds are mutual funds that are required by law to invest in lower risk securities,

The last couple of years should have shown us all, where there is money there is a  risk of losing it. While these investing vehicles may not seem attractive, they are generally safe. Investing money requires risk. One would be wise to spend some time to understand the risks and make decisions accordingly. The economy is in reset mode, and many investors should be as well.

Written by on June 11th, 2009 with no comments.
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