2011 Money Quickies
I wanted to call-out a couple quick things to consider going into 2011. They are easy tweaks to make that can have significant impact on your savings for the future as well as your immediate take home pay.
- Now is the time to make the most of your employer’s match to your retirement account. If you employer matches your contribution I would urge you to make the choice of maxxing your contribution so that the employer is helping double your maxxed savings for the year. If you really want to make a choice in 2011 that will make a bigger difference when you are ready to retire, now is the time to adjust. It may mean less take home pay but you are going to spend less in 2011 anyway, right?
- With the new year you should consider reviewing your W4 form. That’s the form that allows you to claim exemptions on your payroll taxes. The more you claim the less taxes are withheld on your pay checks. If you are getting an abnormally large refund check from Uncle Sam each year, I think you should probably up the exemptions so that you are getting more of your money up front. Thus, allowing you to put those dollars to good use such as paying down credit card debt or monthly bills. On the other end of the spectrum is if you are having to pay Uncle Sam each year in April, I suggest lowering your exemptions so that you are not getting yourself into that financial position. Either way you can go to the IRS website and play with the W4 calculator and see what they suggest.
I hope these simple suggestions help you in your journey to living life richly! Every little bit helps and we all need all of the help we can get! Please share a comment if you have any tweaks you’d like to suggest to the readers as well!
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Savings Accounts Growing
Are you saving more money than you did last year?
Recent statistics show that the amount of money Americans have in basic savings accounts at banks and thrifts rose to a record $5.06 trillion at the end of May, a jump of $215 billion just since the start of the year. This is actually a good thing for our country and is motivation for all of us.
As we try to address our credit and debt issues it is equally important to be putting aside a certain percentage of your wages into liquid savings vehicles. A simple savings or passbook account is a great example even though the yields on interest is very low, they are actually quite safe. You money is easily accessed and will not be exposed to potential loss because of stock market forces that impact the mutual fund and stock investments. We are still in the midst of economic uncertainly so it is wise to build up easy to access reserves.
A good rule of thumb is to set aside 10% of your paycheck into the savings account. Many ask when you should stop. I suggest once you get reserves equal to three months’ worth of salary in the account you are in a wonderful place. At that point it is time to move more money into a retirement fund or other such investment vehicle like certificates of deposit.
No matter the case we all need to get back into the habit of saving money vs. spending money!
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#1 Never ever ever bounce a check. Don’t float that check either!
#2 Start a simple budget, and stick to it. Don’t kill yourself trying to adhere to the budget 100% of the time. It is only a guide.
#3 Pay down high credit debt and begin a savings account.
#4 Open an online investment account, plan for future IRA. Cap your 401K if you have one and your employer has a match.
#5 Pay yourself first (deduct for savings each payday)… it will make your savings easier. And be sure to make it automatic.
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