Why savings are so important.

A very wise person made the comment once, "the distance between your children and the streets is the depth of your bank account".
WOW! That is a true statement.
Take a moment and think about that concept.
If you lost your job tomorrow, if there were no other jobs to be found, if you could not get assistance from the state or federal government, how long could you keep the roof over your children's heads?
We have been told that we need to have six months of expensive in reserve. Okay, that seems like a good amount. But the average person in this economy that has suffered a job reduction or loss is on unemployment for a year or longer. What do you do if the rent is due, or the mortgage, or you have a utility shut off in the mail?

A growing number of people are cashing out their 401K plans. It is their money, that is savings they worked to gather. That is good idea! WAIT! No it isn't. The taxes are PUNITIVE, that means intended as a punishment. The tax consequences can be catastrophic and put an individual in a jam with Uncle Sam. Too many of our contemporaries are using those checks from the credit card companies, or pay day loans to fill up the checking account. However, this is not a good option. The interest rates alone on both of these instruments are astronomical and could have been avoided with a savings account.

Many people use their tax return as a savings plan to "pay off" their debts once a year. However, because they used it all to "pay off" the debts, which is generally just a pay down, the cards are at the previous levels or higher before they get to October of the same year; less then six months later.

I firmly believe that if we set up a GOAL, and a MINIMUM, we can reach the point where if the car breaks down or the kids get sick, or you miss hours or have a reduction in hours, all is not lost.

If your expenses are 1600 a month and you KNOW that you are getting a check every two weeks, you can make contributions to yourself and build a savings, thereby taking one step back from the street every payday.