Trent on Facebook asks what percentage of his income he should put into savings each month. Dave asks him how much wealth he wants to have.Read Transcript
How to Save Money With a Purpose
Every unplanned expense does not have to be a crisis. Imagine if you had $1,000 cash in your hand, ready to pay for that unexpected event. Most people are able to save $1,000 in just a month. You can do it. Turn crisis into peace and start building your emergency fund today!
1) Save for emergencies.
Saving for emergencies is critical. Save $1,000 first, and then pay off your debt. After your debt is paid, save for three to six months' worth of expenses. Saving for life's little and larger emergencies means you'll be ready for the unexpected.
2) Save enough money to pay in cash.
Save for the things you want and pay for them with cash. The only way you can break the habit of going into debt is to get ahead.
3) Saving for retirement is important no matter your age.
Retirement isn't an age. It's a financial number. After your debt is paid off, put 15% of your gross income into tax-favored plans such as your company's 401(k) and Roth IRAs.
Almost 5 million people have taken control of their finances while learning how to save money and invest in their future. Now it's your turn.
How to Effectively Save Money
Hear From the Experts
A listener asks why the fully funded emergency fund has a three-month range. Dave breaks it down.Read Transcript
Donna is concerned about maintaining motivation while she saves up for her emergency fund. She's also worried about retirement. Dave addresses both, explains the reasoning behind the Baby Steps, and offers some encouragement.Read Transcript
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