Every Wealth Advisor whom I talked to about my future says the same thing, Make sure you have saved six month’s worth of expenses ASAP. This rule applies whether you’re single, married, or head of household: with a lot of dependents. The figure to save changes based on the monthly expense level but the same rule applies. This will help cover monthly household expenses if you or your spouse lose your jobs, falls sick, or worse.
“The figure to save changes based on the monthly expense level but the same rule applies”.
I guess this applies to your situation no matter what. I listened to a finance show on the radio and the expert mentioned the same thing for a business. Make sure you can cover six months worth of expenses to weather a downturn. They were talking about a business that had unpredictable earnings and what it would take to feed the animals while there was no revenue coming in. The six month rule applied.
I was thinking about the rule for anyone who is out there and needs to feed a family and maintain a household. The six month rule applies. You need to save enough to cover six months of expenses no matter what: while looking for a new job, changing jobs, or working a seasonal business.
Beyond that, you need additional savings to cover for the likelihood of needing a new roof, furnace, college expenses, vacation, new car. Whatever the case, a savings account with enough money needs to be created and nurtured. This allows you to have peace of mind and not exhaust savings, raid an IRA, or worse borrow to pay for the expense.
Finally, you want to start a 401k, 403b, IRA, or other retirement vehicle and save as much as you can afford to save (monthly) for that retirement which will come faster than you think. This savings account will enable you to have peace of mind that when you can no longer work or want to retire, you will have a nest egg that will supplement your social security income to cover your living expenses then. This will leave you free to pursue your dreams and do the things you want to when you’re retired.
The rule of thumb is to save enough, by the time you retire, to cover living expenses for the rest of your life. This will supplement your social security and pension income and ensure you can live comfortably when you can no longer work or choose not to. You want to hit your mid 50’s knowing that you have enough savings to retire comfortably in your old age. It is nice to know that when you’re ready for that retirement, whenever it is, you have a nest egg waiting for you so you can enjoy your retirement doing what you like to do such as traveling, gardening, spending time with your grandkids, meeting friends, pursuing your dream, writing, hiking, etc.
So, start saving now and make sure that your savings are invested wisely in the stock market so that your nest egg can compound and grow enough to afford that retirement and help you along the way as you meet your life necessities. Be sure to meet your financial or investment advisor and work out a plan of action. They can help chart your future and ensure you’re investing wisely.
Have you started saving yet??