The Future. What will it look like? In the 60’s, people envisioned a world like the Jetsons. Everyone zipping about in flying bubble cars that could fold up into a suitcase and structurally unsound apartment buildings that stretched far into the sky. In the late 80’s, we learned in Back to the Future II that in the future, we will still have flying cars, but they are a little more conventional. Every kid has a hover board, weathermen make accurate forecasts down to the second, and we have TVs that respond to voice commands while displaying 10 channels all at once. Conan O’Brien had his own view of the future as expressed through his recurring segment on Late Night called In the Year 2000. No matter what the future holds, we do know that we need to financially prepare for it. Whether it is for short term plans like vacations or home repairs, savings accounts to help if times get tight, or retirement funds to help after our working years are through, we need to be ready for a wide variety of life experiences that will come our way.

 

I was looking over the Wall Street Journal this morning and came across a good article on saving. In the economy we have been experiencing and with so many people losing their jobs, having a strong savings plan becomes even more important. That is not to say that I am always able to practice these principles, but the article shows a good illustration of appropriate savings goals and priorities for different stages in life.  That is what I found particularly interesting. We’ve all read a lot of articles that talk about savings and how we should save 10% of our income. We should also sock away 10-20% for retirement savings and then there are college tuitions to pay for. Pretty soon, from many authors’ perspectives, you are living on less than 35% of your earned income between how much you “should be saving” and what the government takes out in taxes. This author recognizes that where you divide your savings largely depends on your current stage of life. For instance, if you are just starting out your work career, you main goals should be establishing an emergency fund, paying down debt, and maximizing employer matching retirement contributions. Retirement is still a long way off but you also don’t want to leave money you could be getting sitting on the table. And there is obviously no reason to start saving for upcoming college expenses when you don’t have any kids. 

 

It is important to remember to manage your money. If you don’t manage it, your money will manage you. I have heard people many times before say “I have to have some money before I can manage it”. In my opinion if that is your theory, then you may never have any money. Saving is a learned skill and, once it is learned and practiced regularly, it will become an easy habit. Even if you only have $1. Manage it. I know, it sounds silly. But more than likely, when you start to manage your $1, you will find more dollars that you can manage as well. Before long, you will be in excellent position to handle all the little financial obstacles that life throws your way.