Personal Finance: Saving for the Future

Woe is me. Like most Americans, I would like to lead a comfortable and stable financial life. I have friends who have taken off a year or more to "find themselves" and figure out what it is they want to do in life. They are able to do so because they have the financial means. I on the other hand have endured the travesty of living from paycheck to paycheck at various points in my life. While I have finally accumulated the means to support myself for three to four months if needed, let's face it, who wouldn't like to be able to support themselves or their family for a full year if they suddenly were left unemployed?

After graduating from college, I owed approximately 19K in student loans and had a small credit card debt of 1K due to the purchase of a computer. I was lucky in that I was immediately employed and began making 40K per year. Somewhere in the midst of my high school/college summer jobs and entry into the professional world, I wish someone had been there to educate me about the importance of effectively saving some part of the all mighty dollar.

Sure we all hear about how important it is to begin saving early but what does that really mean to an 18 year-old or 22 year-old. The young ones are lucky today in that many jobs now encourage their employees to sign up for 401K or other retirement funds. However, believe it or not there are still a good deal of young ones and yes, older ones who don't quite get the importance of saving early --even if it is a contribution rate of 1%. Why? They think they will miss the money.

Sad, but embarrassingly enough true, I didn't get a clue until I was twenty-eight years old about how little if at all I really would not miss the money. After gaining employment with a mid-sized corporation, the Human Resources Manager said to me, "Okay kid, all of our associates are automatically enrolled in a retirement plan and you will also automatically be enrolled in that 401K program at a contribution rate of 1%. It will be up to you to change that rate, but we encourage you to not disenroll in the program." Five years later, when I decided to start monitoring the actual dollar amount in my 401K, I was amazed by how much it had accumulated and mentally kicked myself for not having figured it out sooner. Even more disappointing was the lack of education I had received over the years as it related to investing in mutual funds, bonds, stocks and keeping the credit card at the minimum balance of zero.

Don't get me wrong, my credit score is awesome, but I would feel a whole lot better if I had 125K just sitting in some sort of account earning it's own money for me. I wish I had discovered the likes of Dave Ramsey and Suze Orman earlier in my life. If you haven't heard of them, I encourage you to visit their websites: www.daveramsey.com & www.suzeorman.com .These two experts have definitely helped to change my way or thinking. In addition, I implore others to take the time to read, read, read. Learn all you can about eliminating debt and saving for the future. Take control of your money. Saving money may not always mean putting away $100 or even $50 per period. It may mean saving $5 a pay period or $10 a pay period. Do it! You never know what might lay in the future and your rainy day could turn into an unexpected deluge of unemployment for more than a month. This savings account might end up buying the gas, paying the electric bill, or more importantly, paying the rent.

Finally, it's never to late to clean up your act. Identify your areas of weakness. Perhaps you are the lucky one who has no credit card debt but you have nothing in your savings either. If you are living paycheck to paycheck, take on a secondary job. Moonlighting isn't such a bad thing and may only be temporary until you achieve your goals. I just wanted to take a moment to wake a few of you up out there who might still be skating on the weak ice I vacated a few months ago. These are just a few basic things I wish they had told me...