Always save something.  The Fred Young rule – saving something is always better than nothing.

There are lots of categories of savings, but let’s start with savings for unexpected events or emergency savings.  These savings give you a sense of control over your finances and they give you options on how to handle whatever the financial emergency may be.

There are all kinds of rules of thumb for emergency savings:

*Save your age plus 2 zeroes every year

*Save your age every week

*3 months of your take home pay

*2% of gross income

*10% of your take home pay

Some of you may be saying – great, I am okay and others are saying OMG!  The important thing to remember is another hard and fast rule – start with small goals.  Take one of those rules of thumb and adjust it to something that you can achieve at this time.

What sacrifices are you willing to make to meet your savings goal?  Some sacrifices are tough to make, others are much easier.

Financial Fact:  If you save $50 each month starting at age 25 and you earn a 5% return, you will have almost $8,000 by age 35 and over $76,000 by age 65.  (USAA Magazine Winter 2003 – Power of Compounding)

Comment:  “A Penny Saved is a Partner Earned:  The Romantic Appeal of Savers” is a working paper from U of Michigan’s Ross School of Business.