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Monday, April 5, 2010

Save, Save, Save

How do you win with money? Is it possible for the "little guy" to get ahead? Are there any secret formulas to winning? Well, there are things you can do. They aren't complicated, but they are difficult. Every finacial bbok I've read, from Dave Ramsey to Tom Stanley to King Solomon all say pretty much the same the same thing. In order to win you need to start by saving money. Acording to Robert Kiyosaki, author of the "Rich Dad" series, wealthy people save, and then pay their bills with what is left, while the perpetually broke save with whatever money they have left after paying their debts.
In order to win with money, you have to make saving it a vital priority. Dave Ramsey recommends having $1000 set aside for emergencies even before paying off debt. The ultimate goal is to have a fully-funded emergency fund. Dave Ramsey and Larry Burkett suggest three to six months of expenses. Suze Orman suggests a fund covering at least eight months of expenses. Mary Hunt suggests having enough to cover twelve months of expenses. The point is you need to save money to cover your rear in case something happens
Again, let's dream for a moment. How would it feel to have $10,000 set aside for emergencies? Would you react differently when the car starts belching smoke, knowing you some money? When the washer starts making funny noises, would you still spaz out? When the computer won't startup, would you start throwing things?
Saving for emergencies isn't a luxury. If you want to begin winning with money, it is unavoidable.