When it comes to spending money, nobody seems to have a problem. However, when it comes to saving money everybody seems to struggle and for many the idea of setting aside money for their future is just too much. It’s estimated that the average American family needs at least 4 months in savings saved up in an easily accessible cash fund. This will be sufficient to see you through in case of an emergency.
So, if you love to spend and hate to save, then you may have a problem. In fact, many people found out the hard way when thousands of people lost their jobs during the recession. Saving money is much more than just having the backup for when things turn bad. Its really about having financial security and building a nest egg for your retirement. There would be nothing worse then coming to the end of your working days and not having the money to survive.
While there are many reasons why people struggle to save money these days, the real reason has nothing to do with bills, your jobs, finding the right savings account or anything like that. the real problem with saving is much more personal and it boils down to this simple thing called self disciplined. Having the financial discipline to set aside a percentage of your earnings every month is the real secret to saving money and to build your retirement fund with confidence.
Although we all have more or less self discipline, when it comes to money only a few people have the self discipline to set aside for their future. For the rest of us we needs a plan and the easiest way to make it happen is to follow some age old financial advice: Pay yourself first!
Huh? Yes, you need to make saving your first and most important priority and the best way to do that is to set up a direct deduction on your bank account so that the money leaves your account first thing every month. It will probably be though for the first month or two but once you get used to it, its really painless and works incredibly well.