Savings

Saw the following articles are very interesting and true. Would like to share with you.

http://sg.finance.yahoo.com/news/10-Things-You-Should-Know-usnews-3051642150.html?x=0

One of the most important things you can do for yourself -- and your future -- is to set aside money for saving. Opening a savings account is a good way to start. A habit of saving can help you achieve financial freedom, since you will be prepared for emergencies, as well as prepare for the future that you want. In order to help you better understand the process, here are 10 things you should know about saving your money:

1. Compound Interest Really is Magic
You should realize that compound interest really can help you build your savings faster. This means that the earlier you start, the more your savings will grow. Additionally, realize that the best yield matters, so you should look for high yield money market account or savings.

2. It's OK to Start Small
Many people think they need to start with $1,000 for an emergency fund, or make a big contribution to a retirement account. This is not true. It is OK to start small. Figure out what you can afford now, and get in the habit of saving. Just make sure to increase the amount you save as your income increases, and/or as you pay down debt.
3. You Need Savings Goals
Carefully think about what you want your savings accounts to accomplish, and set goals. Having goals for your money will help you better prepare, and it gives you something to work for. Then you need to create a plan to help you reach those goals.


4. Different Accounts Accomplish Various Purposes
There is more than one kind of savings account. You should have different accounts for different goals. Your emergency fund should be distinct from your retirement account, and savings for short term goals should separate from both of those. Consider the type of account you need for each of your savings goals.

5. Savings Should Be Part of Your Budget
You will be better off if you make your savings part of your budget. Think of your savings contributions as an "expense" -- and an important one at that. Put "paying yourself" at the top of your financial priorities list.
6. Cash is Not Always King
When it comes to saving, cash is not always king. While you want your emergency fund and short term savings goals to benefit from the liquidity of cash, more long term savings endeavors need something with a higher yield. Long term, you need to beat inflation, so that your buying power isn't eroded during retirement. Consider investments like stocks and bonds for long term savings goals, like retirement.
7. For Retirement, Max Out Tax-Advantaged Accounts First
One of the ways to get ahead with your retirement savings is to invest. Before you start using a regular investment account, though, make sure you have maxed out your tax-advantage first. Putting money into a 401k and an IRA (including Roth options) before you move to other types of investment accounts is a good idea, since you will see tax advantages.


8. Sometimes You Can Save for Others
If you want to help others, you can do so by saving for others' futures. College savings accounts, trust funds and accounts for charitable organizations can help you leave a legacy, and feel good about what you do with your money. And in some cases, you end up with a tax break.
9. Spending is Never Saving
Many people talk of "saving" when they get a "good deal." However, you really are not saving in such cases; you are spending money. If you do not need the item, or do not even really want it that much, then the spending aspect is even more pronounced. Do not confuse getting a good bargain with actually saving money.

10. It is Possible to get Too Carried Away
While you want to save for the future, it is possible to get too carried away with saving money. Remember that life is for living as well. Strike a balance so that you are saving enough to protect you during an emergency, and to help you toward a fulfilling retirement, but do not lose sight of today.

Here is a simple fact about budgeting. Just because you have a budget doesn't mean you manage your money well. If you don't believe this, consider the U.S. government. It has a budget--enough said.


Budgets can be a great tool to help you achieve your financial goals. But if you approach budgeting the wrong way, it can lead to frustration, stress, and even more spending. So to help you stay on track, we've identified seven costly mistakes people make when trying to manage their monthly budget, along with a few suggestions on ways to avoid these mistakes.

1. Picking the wrong tools: As an initial matter, it's important to start with the right budgeting tools. There are no one-size-fits-all solutions. For some, the best tools may be a pad of paper and a pencil. For others it could be a spreadsheet or personal finance software. And there are even online alternatives such as Mint.com. The key is to find what works best for you and stick with it.

2. Trying to track everything: There is absolutely no need to track every dime you spend. For most of us, we over spend in just a few categories. So pick the areas that cause you the most trouble, and track just those categories. It will make budgeting a lot easier and less time-consuming. The key is to ask this question--how will tracking my spending in this area help me better manage my money? If you can't answer that question for a certain category of expense, there is probably no need to track it.
3. Setting unreasonable goals: Similar to dieting, we can kill a budget if we set unreasonable goals. We need to allow room in our budget for fun and for unforeseen expenses. If part of your budget is paying down debt, make sure you are realistic about how much you can pay on the debt each month. If we set unreasonable goals, we are much more likely to give up when we don't reach them.
4. Failing to plan for periodic expenses: Annual or semi-annual bills can wreck a budget. Whether it's life or car insurance, taxes, or gifts, it's best to plan for these expenses on a monthly basis. One easy way to do this is add up the annual cost of these periodic expenses, divide be 12, and save that amount each month. When the bill comes in, you'll have the money saved in advance to pay for it.
5. Failing to plan for emergencies: An unexpected expense can bring down a budget quickly. Whether it's a car or home repair, or perhaps a medical expense, emergencies can throw us deep into debt if we are not prepared. While we can't prepare for every financial situation, building up an emergency fund can help us handle many unexpected expenses. On a monthly basis, set aside money in a high interest savings account, to build your emergency fund.

6. Failing to Automate: Automating your finances can go a long way to helping you plan and budget. Whether it's paying bills automatically from your checking account or automating your retirement investments, automation makes life easier. As part of automating, consider paying recurring monthly bills and expenses with a credit card. By using a card, tracking these expenses is automatic. And if you use one of several of the best cash back credit cards, you get the added benefit of pocketing some extra cash each month. The key, of course, is to make sure you pay off the credit card bill in full each month.

7. Giving up: This last mistake is the most costly. If you are trying to budget and manage your money, you will make mistakes. You'll buy something you later regret buying. Or you'll forget about a periodic expense until the bill comes in. Mistakes happen. The key is to persevere. And to do that, it's helpful if you recognize up front that you will have set backs. By expecting them from the start, you'll be more prepared to deal with them when they arise.
http://sg.finance.yahoo.com/news/How-to-Fix-7-Common-Budgeting-usnews-1613243814.html?x=0

http://sg.finance.yahoo.com/news/Sacrifices-You-Shouldnt-Make-usnews-4019709337.html?x=0

For those of us who think of the money side of retirement often, it's easy to forget about the fact that the day we decide to retire is just another day in our lives. It's not the start, but it's not the end either. There's a whole lot of mileage left in our journey, even after we decide to forever pack up our suits and formal dresses for good.


Reaching a number in your retirement account is not the end goal. That number is merely a checkpoint in our journey that allows us to change how we spend our days. Here are a few things you will regret doing later if your motivation is just to get a higher 401(k) balance.
Neglect your friends and family. Sadly, this is quite common. Whether it's the pressure from the corporate ladder or just personal greed, friendships seem to grow farther and farther apart as we age. Countless studies have shown that people are happier with the right support group. Isn't happiness the real goal we should be striving for? You don't want to retire with a bunch of money, but all alone.

Fail to develop a passion. Are you one of those people who works so many hours every day that you think taking a coffee break is a vacation? Perhaps when you take a vacation you don't know what to do all day. Now multiply that feeling by 24 and then 7. That's retirement. Develop a passion and your retirement life will be fulfilling. If you don't have a plan for how to spend your time in retirement, you might as well just keep working.

Ignore present pleasures. Money is not just for hoarding, but for spending too. Having a multimillion dollar bank account balance is awesome, but most people would agree that it's not worth it if you have to eat plain white noodles everyday for the rest of your life to accumulate that amount of money. The future is important, but the present is equally significant.

Forget that retirement is just a checkpoint. Retirement is not the end. Just like college graduation, the last day of your career is just a change in your daily schedule. Having a high net worth is nice, but a fulfilling retirement is nicer.