Skip the Happy Hour, Keep the Cash

By
Hilary
Published: June 24, 2009Posted in: FinanceTags: , , , ,

To all those 22-35 year olds out there, here is a hint: stop waiting for your big break, the government suspending taxes or winning the lottery and start saving your money now.  The government gave banks, insurance companies and the failing American automakers $700 billion, and you will not see a penny of that money.  The reason some of those banks were in dire straights is because of outdated regulations which do not force banks to plan for the future or an economic meltdown.  Instead of bitching about how they got all the money, learn from their mistakes.  Save when you can.

The Bureau of Economic Analysis has reported that the personal savings rate of Americans has reached a ten-year high at 4.2 percent in the first quarter of 2009.  This is great, finally, some of us are getting it.  However, they also reported that household income has dropped.  But people can start saving well before the economy tumbles and jobs are being lost.  Saving $20 a week can result in $1040 a year.  Not to mention the retirement fund you should be putting something into.  If your employer offers a retirement plan, and especially if they offer some type of financial match, contribute an amount that you will not miss (3-5 percent is a good start).  It is plain stupid if you are not contributing something to a retirement fund.  What are you going to do when social security runs out?

I understand that you have to pay for rent, food, gas or transportation, car insurance and those pesky student loans.  Saving is hard and especially now that your dollar does not go as far and the amount of money you are getting paid does not keep up with inflation.  But is the $20 all you can drink happy hour before 9 pm really worth it the possible hangover, extra cash on drunk food, apologetic email/text the next day and the fact that you just lost at least twenty bucks and then repeat the next week?  Maybe that Friday you lose your job, gas prices have gone up and low and behold you are broke.  Skip the happy hour, keep the cash.

Life is about choices and there are some tools that are out there that can help you make these hard choices.  I am personally not a fan of the advertisements for certain financial institutions, but www.mint.com is a free way to help you manage your money and create budgets.  It allows you to set up budgets, provides email alerts and can show you item by item what you are wasting your hard earned money on.  Some friends use it and love it.

You have all seen the commercials for www.feedthepig.org and are a bit scared of the guy in the pig head, but it’s a good site.  It also has a link to www.360financialliteracy.org which provides additional information for people of all ages.

I am not going to tell you to stay-in and be a hermit.  But there are ways here and there to avoid spending excessive amounts of money, keep your social life and protect yourself in the case of another financial meltdown.

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