Will the outcome of the Presidential election matter to your money?
Both sides in this election are calling it the most important in our lifetimes. And there are, in my view, important differences between the candidates.
Of course, there's more to national politics than just our money, and certainly every voter should consider other issues that are important to them.
But no matter the outcome of the election, chances are that there's something else that's even more important to your financial well-being over the next four years:
Your own financial habits.
As a wise person once said, it's not what happens to us, but how we respond to what happens that makes the difference. And there's a group of people who just aren't as worried about any financial fallout of this fall's elections: savers. People in the habit of saving some money out of every paycheck typically have substantial cash in reserve, and more in retirement assets than non-savers. Sure, you could be bailed out by an inheritance or some other windfall. But I've never heard anyone complain about having saved too much from their paycheck.
If you save out of your current income, and you do it well, you'll probably never want for anything. If you don't, you risk living hand-to-mouth for the rest of your life.
And that's truth is not likely to change, no matter who wins this election, or any other election.
(By the way, for more information on how to save more out of every paycheck, see my forthcoming book Don't Make a Budget: Why It's So Hard to Save Money and What to Do About It, due for release early in 2009.)
Copyright © 2008 by Kenneth F. Robinson
Sunday, November 2, 2008
Friday, October 24, 2008
It's October 2008: where do you save now?
Another day, another three-digit drop (or jump) in the Dow Jones Industrial Average.
The Dow is one of the most widely reported financial statistics. We can hardly help hearing about it, especially when it makes the headlines.
It may actually mean something to investors, who have by and large sustained staggering losses these past several months. Even if you're not an investor, you're probably wondering what you should do about all this financial turmoil.
While these unsteady times should prompt different action steps by different people, most Americans should consider filling a glaring gap in their financial plans:
They should put more money into their emergency funds.
It's generally agreed that too few households have enough in emergency cash reserves. So if you're trying to figure out where your new savings should go in these financial times, it's a decent bet you're one of the many people who should have a larger cash reserve. This could be for emergencies or just to free you from feeling like you might need to spend on a credit card.
The question of whether stocks are about to go lower or higher really should interest only those who have enough cash to tide them over until this financial crisis has passed. If that's you, great. If it's not, it's questionable whether (or how much) you should have in stocks in the first place.
If you save money out of every paycheck, and you're not certain where it should go in times like these, put it in FDIC-insured savings accounts, or a guaranteed account in your 401(k) or other retirement savings plan. True, such accounts might not be ideal for your unique circumstances, But it's better to save, even imperfectly, than not to save at all.
Remember, your emergency funds and other cash reserves aren't intended to make money. They're intended to be safe. And as good savers have long known, when the stock market is especially volatile a little extra safety feels very reassuring.
(By the way, to learn how to save more money out of every paycheck, look for my forthcoming book, Don't Make a Budget: Why It's So Hard to Save Money and What to Do About It, due out in January 2009.)
Copyright © 2008 by Kenneth F. Robinson, all rights reserved.
The Dow is one of the most widely reported financial statistics. We can hardly help hearing about it, especially when it makes the headlines.
It may actually mean something to investors, who have by and large sustained staggering losses these past several months. Even if you're not an investor, you're probably wondering what you should do about all this financial turmoil.
While these unsteady times should prompt different action steps by different people, most Americans should consider filling a glaring gap in their financial plans:
They should put more money into their emergency funds.
It's generally agreed that too few households have enough in emergency cash reserves. So if you're trying to figure out where your new savings should go in these financial times, it's a decent bet you're one of the many people who should have a larger cash reserve. This could be for emergencies or just to free you from feeling like you might need to spend on a credit card.
The question of whether stocks are about to go lower or higher really should interest only those who have enough cash to tide them over until this financial crisis has passed. If that's you, great. If it's not, it's questionable whether (or how much) you should have in stocks in the first place.
If you save money out of every paycheck, and you're not certain where it should go in times like these, put it in FDIC-insured savings accounts, or a guaranteed account in your 401(k) or other retirement savings plan. True, such accounts might not be ideal for your unique circumstances, But it's better to save, even imperfectly, than not to save at all.
Remember, your emergency funds and other cash reserves aren't intended to make money. They're intended to be safe. And as good savers have long known, when the stock market is especially volatile a little extra safety feels very reassuring.
(By the way, to learn how to save more money out of every paycheck, look for my forthcoming book, Don't Make a Budget: Why It's So Hard to Save Money and What to Do About It, due out in January 2009.)
Copyright © 2008 by Kenneth F. Robinson, all rights reserved.
Sunday, October 19, 2008
Why isn't everyone worried?
As my forthcoming book, Don't Make a Budget: Why It's So Hard to Save Money and What to Do About It, approaches its publication date, I thought I'd post a few words on who's not worried about the financial crisis.
Yes, there really are people just like us who are untroubled by the economic distress that has dominated the news these past several weeks. And no, they're not living on another planet. How can they not be worried? The answer is simple:
They have enough money, and they know it.
No, most of them didn't inherit it. They worked for it. But then they did something that most people don't do (or at least don't do enough).
They saved some of their money. They probably saved a little out of every paycheck.
I've heard one "financial professional" after another state categorically that you can't expect financial success if you don't budget. But they're wrong. You don't have to budget to save money. You just have to spend less than you take in, by a large enough margin, for a long enough time. And you don't need a budget to do it.
Paying yourself first is a perfectly satisfactory way to save money, and it can be very effective. In my experience, the saver who pays himself first is more likely to be successful saving a substantial amount of money, to take less time to do it—and to enjoy the process far more.
I'll have more later this week on the subject of saving money. Until then, please take a look at the poll on this page. When I ask my audiences how many of them have tried budgeting, the number is surprisingly small. Please add your voice, and let me know if you've ever tried to make a budget.
And please share your comments on what you'd like to see me cover in these blog posts about how to really save money out of every paycheck.
Copyright © 2008 by Kenneth F. Robinson, all rights reserved.
Yes, there really are people just like us who are untroubled by the economic distress that has dominated the news these past several weeks. And no, they're not living on another planet. How can they not be worried? The answer is simple:
They have enough money, and they know it.
No, most of them didn't inherit it. They worked for it. But then they did something that most people don't do (or at least don't do enough).
They saved some of their money. They probably saved a little out of every paycheck.
I've heard one "financial professional" after another state categorically that you can't expect financial success if you don't budget. But they're wrong. You don't have to budget to save money. You just have to spend less than you take in, by a large enough margin, for a long enough time. And you don't need a budget to do it.
Paying yourself first is a perfectly satisfactory way to save money, and it can be very effective. In my experience, the saver who pays himself first is more likely to be successful saving a substantial amount of money, to take less time to do it—and to enjoy the process far more.
I'll have more later this week on the subject of saving money. Until then, please take a look at the poll on this page. When I ask my audiences how many of them have tried budgeting, the number is surprisingly small. Please add your voice, and let me know if you've ever tried to make a budget.
And please share your comments on what you'd like to see me cover in these blog posts about how to really save money out of every paycheck.
Copyright © 2008 by Kenneth F. Robinson, all rights reserved.
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