Gold 401K

Gold Sep Ira Worksheet
Gold Sep Ira Worksheet

Saving a part of your income each month is one of the most important things you can do. It is widely recommended that you should save from 10 to 20% of each month’s salary. While the specific amount saved will vary depending upon your unique circumstances, the important thing is to save, and save regularly.

Saving has been described as ‘paying yourself.’ It is that part of your income that is discretionary. Why, though, is it important to save?

Emergencies: Things happen, and they often happen at a time that is least convenient. Emergency medical bills; the car broke down; or, the basement is flooded. These are the types of emergencies that cannot be ignored, and without a cushion of savings to help you deal with them can put you into a debt hole that is hard to dig out of. A rule of thumb is that you should set aside the equivalent of 3 – 6 months net income for emergencies. This amount should be separate from savings for any other purpose.

Debt: Credit card debt starting to get you down? If you have been saving a percentage of your income every month (less that set aside for emergencies), you could consider using it to pay down on the debt, saving in monthly interest payments, and just possibly saving your credit rating.

Luxury items: A good way to save for that special vacation, a new car, or some other nice-to-have but not essential item, is to set aside an amount from your pay each month for it. Just think how much more fun a vacation would be if at the end, you’re not faced with a mountain of credit card receipts; or the look on the salesman’s face when you blithely inform him that you’re paying cash for that new car.

Retirement: This is not the least important reason that saving a part of your income each month is a good idea. More and more, workers are being forced to plan for their own post-employment annuity. Putting a percentage of your current pay into an interest-bearing account (preferably a tax-deferred IRA) could make a significant difference in your retirement living standard. Even if you have a good employee retirement plan, every little bit helps.

To determine how much you can afford to save each month, take a look at your cost of living. If the amount you chose causes a bit of discomfort, but all the essentials are taken care of, you probably have it about right. Every now and then, you can ease up and let yourself have a little fun, but you should endeavor to stay with that percentage as often as possible.

Oz Hoopes is a freelance writer. Learn more about saving money and payday loans from http://www.getecash.com/