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Stop the presses! I know. I’m late on this post today. It happens. 😀 Why am I late? Because I was doing some work for a few other bloggers. That’s okay. Like I said. It happens. Next time, I’ll plan my schedule better. Aside from the fact that I’m late, maybe you’re wondering WHY I was working for other bloggers? It’s not because I desperately need the cash. While any cash is great, it’s simply because I want MORE cash than I have now. Why do I want more money? Because I’m trying to build wealth for my family…and you should be too.
Building wealth for ourselves and our families is so important. Except we are also told that saving money is too. Figuring out which one is correct can be a truly mind-blowing experience for some…especially if you’re new to the whole shebang.
Let me help you bust through the confusion…they’re BOTH right.
When we look at building our financial lives we need to not only be looking at saving for emergencies, but also building our retirement and building wealth at the same time. By doing so, we ensure that we have a fund set aside for whatever life seems to throw at you and that when it’s time to retire or quit working, you’ll have enough to live comfortably. Savings alone won’t provide the life that we are looking for, but neither will wealth. I don’t know about you, but for me personally, I want to know that not only are those emergencies and my “wants” are covered, but that there is enough money in the account to cover any regular expenses that we may have as well as enough to retire on. I’m not getting any younger and even though I’m only 33, retirement has been on my mind a lot lately.
Savings accounts, while they’re a must have? They don’t grow very well. Even a money market account, which typically has a higher interest rate than a regular savings account, won’t grow for you the way that an investment can. So your money kind of just sits in that account, accruing a few pennies a year interest when it could be out earning for itself. That’s why it’s so important to do both. Yes, keep your savings accounts. Build them up to where you could live off of them if you needed to, but take the rest of your money and plant it. If each dollar is a seed then plant them deep so that eventually you do have the proverbial money tree.
So how do you do both? It’s not as hard as you may think.
To start with you’ll want to build your emergency fund first. This one is by far the most important of the two accounts. You’ll want to build it up to $1,000 as quickly as you can. This may not be as hard as you think since just $16.66 per day can help you get there in just 2 months. You must have these funds set aside for those pop up emergencies like car repair or a sudden family trip. Once that is set up, think about other savings that you might need. Do you want 3-6 months of living expenses in the bank? Do you want to have an account set aside for a new car? Whatever it is, make sure that you have the accounts for them taken care of and at least half full before you start to work on building wealth.
Once you’ve got that taken care of, it’s time to move on to building your retirement and building wealth. I love the text message method that I use, but if that isn’t something you want to look at doing, consider talking with a financial advisor. Investments are a great way to build your financial portfolio. For new investors, go with something a bit “safer” like a bond or a money market account (although do keep in mind that there are no truly safe investments and that everyone carries risk). Bonds are easily to understand though and depending on what you pay for the bonds themselves can net a nice, tidy profit for you.
As you’re building your portfolio, be sure that you don’t forget to save too. Doubling up on what you’re doing financially is never a bad thing (unless you’re doubling up on spending of course). Continue to save, continue to build and when you’re ready? You will have built a financial future for yourself and your family like you’ve never imagined.