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In today’s harsh economy, people who are earning regular income through employment are considered lucky. After all, they do not need to worry about their day-to-day expenses. They can support for their needs and the needs of their families. However, if you’re currently employed, you should not remain too complacent — you must think about your future and those of the whole family. Thus, saving part of your income is a must — that is, if you plan to enjoy a fruitful and financially secured future.
Are you already employed? If you are, how far have you gone when it comes to saving and retirement planning? Perhaps you are thinking that you are still too young and it is still too early to plan for retirement — after all, you want to enjoy what you are earning while you could. This is understandable, most especially for young people who have just started to have a job and earn their own income. However, young people like you must be educated about retirement planning as early as possible. By retirement planning we mean saving and investing. Besides, we all know that when it comes to saving and investing, time is of the essence.
The Art Of Saving
Saving refers to the act of setting aside money from your regular income for future use. This is usually done for short-term purposes. Most people save money for a certain financial goal – which is not that much. For example, if you are planning to buy a new gadget, such as a high-end cellular phone, then you will need to save part of what you earn in order to put up a certain amount of money to be able to pay for the price of the phone that you are planning to own. Usually, saving does NOT guarantee financial stability.
For the vast majority of people, paying off their debt and saving money for specific goals can be accomplished painlessly. That is to say, most people can pay off their current debt and start a saving fund for a goal or even retirement without having to make any major changes to their current lifestyle. So how can this be done? By simply monitoring and rearranging how you spend your money.
There really is an art to efficiently spending money and saving your money. Just like any other skill, it is simply a matter of study, and practice, to get better at it. Practice makes perfect, right? While it may be easier for some people to acquire the saving skill than others, anyone can easily learn the basics of saving that can help them save thousands of dollars a year.
The Art of Investing
When it comes to long term financial goals, investing is the key to success. Investing, however, is much riskier compared to saving. After all, when we say investing, there is no certainty that we will get back what we have put up. There are risks that are accompanied with investing — and successful investors learn how to handle such risks.
Most people who are employed and earning a taxable income start to invest through an Individual Retirement Account, or IRA. This is an investment vehicle which makes a good option to save up and grow money as retirement funds. Choosing the best investment types for IRA that provide the best IRA rates possible is highly recommended so that investors will get the best chances for higher returns. But of course, it is mandatory for the investors to be educated about particular investment accounts before they finally gamble their hard-earned funds with such.
If you are just new with your job, it is best to start saving and investing as soon as possible. This will not only give you more advantage of gaining better profits, but this will also give you more opportunities to learn and master the art of saving and investing.
Author Bio: Kathleen P. Urie, CFP, a Certified Financial Planner, is a financial consultant and contributor to NewIRARules.com. She has been a retirement planning specialist for over 20 years and provides financial and retirement planning services to individuals to help them better protect their future.