As everyone in Connecticut and South Windsor gets ready for the Memorial Day weekend and hopefully a chance to relax between the kids games and BBQ’s, but come Tuesday back to work.
So each month you settle down to pay bills. You pay your mortgage lender. You pay the electric company. You pay the trash collector. But do you pay yourself? One of the most basic tenets of sound investing involves the simple habit of “paying yourself first,” in other words, making the first payment of each month into your savings account. Americans’ saving patterns vary widely. And too often, short-term economic trends can interrupt long-term savings programs. For example, the U.S. Personal Savings Rate reached 6.5% in December 2008 following the housing and banking crisis. Three years later, as the economic environment appeared to stabilize, the savings rate fell to 4%.1
The Genius of Pay Yourself First
Anyone who’s ever managed their own finances knows that saving can be a challenge. There seems to be an endless stream of expenses that demand a piece of each month’s paycheck. Herein lies the genius of paying yourself first: you get the cream at the top of the bucket, and not the leftovers at the bottom. The trick is to prioritize. Make it a point to put your future first. At first, saving may mean a small lifestyle change. But most individuals want to see their net worth increase steadily. For them, finding ways to save becomes more of a long-term commitment than a short-term challenge.For more information http://www.mundofs.com/resource-center/money/pay-yourself-first
1. Bureau of Economic Analysis, January 2012 2. Distributions from 401(k), 403(b) and most other employer-sponsored retirement plans are taxed as ordinary income and, if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2013 FMG Suite. This is not intended for transmitting orders nor instructions regarding your account nor any other critical or time sensitive information. Information contained in this communication is not considered an official record of your account and does not supersede normal trade confirmations or statements. Any information provided has been prepared from sources believed to be reliable but its accuracy is not guaranteed. This retained and may be produced by Investacorp to regulatory authorities or others with legal rights to the information. Securities are by licensed individuals offered through Investacorp, Inc., a Registered Broker/Dealer, Member FINRA and SIPC.
