Skip to main content

Make that 10% Count

 Saving 10% of your income every year, is recommended by Greatvest Tools, for everyone. 

Why? Over and above paying for your regular living expenses and taxes, saving 10% of your income each year allows for the steady buildup of cash and other assets (home, investments, etc.) that will provide for your financial needs now and in the future. 

One recent member was surprised when she received her plan and found that her first step was to top off her savings to 10% this year. We encouraged her to not get too worked up about it because she has two children in college at the time and her life was all about watching cell phone and other costs continue to hit on the monthly Amex bill. She said, "When I die, I want to come back as my kids!"

The data shows that if we are careful and save 10% year year, we will significantly reduce the risk that we will not have the money we need in the future. She reported that she had already started to look at all those extra expenses -- the cable bill, the Internet subscriptions, the travel costs, to find areas to pare back. Does she really need Netflix, Hulu and Prime?

What counts in the "Save 10%" calculation in Greatvest Tools? We start with your annual income, less your annual expenses. From that total, we add your annual contribution to your retirement accounts, if any, and subtract your taxes for the year. The result is how much you are saving this year. Your savings percentage takes that number and divides it by your annual income. 

Saving 10% of your income remains important throughout your life for keeping debt in check, providing the right cushion for emergencies, funding your retirement and for making sure you don't run out of money during retirement itself. 

So she'll need to do some "catch up" when the kids get off the gravy train. We're confident that it will feel good for her to get back on track. 

Comments

Post a Comment

Popular posts from this blog

What Are The Best No Annual Fee Travel Rewards Cards?

Do you refuse to pay an annual fee of $95 or more for a credit card? No problem - you can still earn fantastic travel rewards with these cards that, in some cases, can be worth more than cash back.  Everyone loves the idea of travel hacking their way across the globe. Trouble is, many of the best travel rewards credit cards have annual fees of $95 or more, and most don't love the idea of paying an annual fee to earn "free" travel. Fortunately, there are plenty of good no annual fee travel rewards credit cards. These cards are perfect if you want to pocket points toward a free vacation but don't spend enough - or don't want to spend enough - on your cards justify an annual fee. In some cases, you might just be against the idea of paying an annual fee on principle. Either way, consider those top travel reward cards that do not charge an annual fee. Best no annual fee travel rewards credit cards BankAmericard Travel Rewards Credit Card Card...
Post a Comment
Read more

Avoid These 5 Pandemic Money Mistakes

 There's no doubt 2020 has been one of most unsettling years in recent memory. For many, it's meant job loss or reduce income. And even if you've maintained full employment over the last several months, staying focused has been challenging. All this has led to people making some common pandemic money mistakes. Let's see what they are, and how to get back on track. Not Budgeting When things are unsettled, it's easy to slip into an "anything goes" mentality, and that's particularly true when it comes to finances. Even many committed budgeters have let their discipline fall away during these uncertain times. But planning and maintaining a budget is actually one of the best things you can do to regain a feeling of power and control. While the world outside might be going crazy, it's entirely within your power to keep track of how much money you have coming in, how much is going out and knowing exactly where it's going.  Not Setting Aside Savings In...
Post a Comment
Read more

Everything You Need to Know About Inheriting Money

While inheriting money, property, and other assets can bring about positive changes for your household, handling an inheritance can be difficult as you'll almost certainly be dealing with a loss at the same time. One important piece of advice -- take time to process the loss before making big lifestyle or financial choices. However, don't wait to understand the tax implications or hire professionals to help. Then, once you're ready, you can implement your plan for using the money. Many People Don't Pay Taxes On Inheritance As the recipient, you won't have to pay any federal income or estate taxes on an inheritance. About 55% of inheritance are less than $50,000 according to the Federal Reserve, with an additional 30% being in the $50,000 to $249,000 range. Estate taxes can be imposed on the decreased's estate, but that happens before you receive your portion of the inheritance. Even then, there's an $11.2 million exclusion for federal estate taxes, and most ...
Post a Comment
Read more