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How to save $200,000 dollars in 6 months |
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.THIS IS SOME1 ELSES STORY.THIS IS NOT MY STORY.
Many years ago, when I was breaking up with my then-fiancé, I needed to find my own apartment. But I had no idea how I would be able to afford it.
The problem, plain and simple, was that I didn't have a dime in savings. OK, maybe a dime, in a dusty tray on my desk, but that was it. I hadn't even signed up for the 401(k) plan at my job.
Then one day, as if the Money Fairy had heard me crying, a credit card appeared in the mail!
The credit limit was $6,000. I felt as if someone had handed me a bag of gold. Here was my moving-out money! Here was my freedom!
And there went my financial sanity.
Caught in the debt spiral We have all heard about rising consumer debt, but the flip side of that sad story is the plunge in the national savings rate in recent years.
In a 2006 report, only about 18% of middle-class families said they had three months' expenses saved, according to the Center for American Progress, a liberal think tank in Washington, D.C.
Worse, nearly 60% of people 44 and under didn't even have $500 set aside for an emergency, according to the Federal Reserve Board's 2004 Survey of Consumer Finances.
Small wonder that many people feel they have no option but to use plastic in a crisis.
You can trace the downward spiral from there: You start with no savings cushion, you stumble into debt, and your paycheck has to stretch to make ends meet and pay off the debt, so how can you save?
Save your sanity Lindsey Garver, a graduate student in microbiology who lives near Washington, was concerned that some of the Women in Red members were so focused on paying off debt that they were overlooking the protective power of savings.
In January, she helped to launch the Women in Red Savers thread, a message-board support and discussion group for anyone who wants to save for any reason, including those who don't think they can.
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Many people start at zero, Garver says, and some add only $10 or $20 a week or even each month. "Some go slower, and some go faster," she says, admitting she falls into the tortoise category.
"The main purpose of the thread is to get people excited about posting even a small amount," Garver says.
Andrea Holder, who joined in February, agrees: "With the Savers, you can say, 'I just saved $27.63!' and people will give you thumbs up. You can't even do that with your best friend."
Some people join with a finite goal: a wedding, dental work or a down payment. Some want to increase their retirement nest eggs.
But many women, Garver says, set up multiple savings accounts to cover a host of life's expenses, from holiday gifts to car insurance to property taxes to an unexpected home repair.
To save is to give yourself a margin of sanity, Garver says. "On a grander scale, it's not about being able to pay your property taxes -- it's about the security it brings. You're not worrying because you've got things covered."
Focused on the future Andrea Holder is building that peace of mind at steep odds. Holder, a waitress and hostess at two restaurants in Shelby, Mich., says she works 60 hours a week and her husband 40 hours, not just to pay off $50,000 in credit card and car debt but to save for their futures, too.
After their son was born early last year, "I had an epiphany," she says. "Wow, we're adults now; we're parents; we better get this together."
Neither her parents nor her husband's have saved enough for retirement, Holder says. "I don't want to end up like that."
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Holder says that if she and her husband focused only on aggressively paying down what they owe, they could be debt-free in about three and a half years. But she didn't want to do that.
She knew they'd need a cushion to keep them afloat while they paid off their debts. "And if we're saving for those three years, the money is earning money, and by the time we retire, that adds up."
Holder set up savings accounts for a home down payment, an emergency fund, a holiday gift fund, a savings plan for their son and a vacation stash. She also opened a Roth individual retirement account and intends to save more in her company's 401(k) now that she is eligible.
Since joining the Savers, Holder says, she has paid off about $9,000 in debt and saved $2,000.
Sometimes she's discouraged that she hasn't saved more. But mainly she is amazed by the way saving has changed their lives.
Continued: The secrets of savers
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Sakura1406 · Fri Jul 20, 2007 @ 05:25pm · 0 Comments |
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