Saving for what?

1. Emergency fund
2. Retirement fund
3. Kids college fund
4. Gotta-have fund

Just started working? Create the emergency fund. The simplest fund of all.

How much for this fund? It depends on your lifestyle really but it should be enough to cover about SIX months of your expenses. Calculate the amount all you need to live monthly, food, rent, installments, etc.

Why six? If you are out of job, that is the 'allowable' time for you to live out of your emergency fund while looking for another job.

So when you lose your job, you are able to stay calm before moving on to next pasture.

Saving Plan

The simplest of all. Earn and save, save, save your earning. How much to save? Rule of thumb say 10% at least. The more the better. This is the concept of 'pay yourself first'. Two major difference between a business and an employee. Business spend before paying taxes. Employee pay taxes first before you spend.

You work hard to earn that income but when that income comes in every month, you pay bill, clothes, transportation, etc and have very little left or sometimes nothing at all. Then comes those "help" in the form of plastic money that even children knows it. More on this plastic later...

No matter how small your income is, paying yourself first is the best and logical thing to do to yourself. If you are not doing this, you are not fair to yourself. Agreed?

How does paying yourself help? Get back to the calculator and see how  that 10% of monthly salary will add up through the years. Go, find out yourself.

Life doesn't require that we be the best, only that we try our best. Strive for excellence, not perfection. -- H. Jackson Brown Jr.