Little Black Village Dollars and Sense
Thought for the month, “A penny saved is a penny earned.”
In the column, I will share with you, from a layman’s perspective, ways to become debt “free”dom, by establishing a savings plan and paying off debt. Some of the information I will present to you will come from the following sources: Money Magazine, Dave Ramsey, Suzy Orman, Kiplinger, and various other printed materials, just to name a few.
First things first, let’s start with the definition of saving: A consistent pattern of putting away a certain amount of your income on a regular basis. This means that you will set a goal and EVERY pay period, you will put this “goal” amount in your savings account. For those who are spiritual, you are familiar with the term “tithe,” which means a tenth or 10%. This is 10% of whatever you receive as income. So let’s take a look at a few scenarios:
|Net Income Amount||Pay Frequency||Tithe (10%)||Savings Goal||Amount Saved per Pay Period||Yearly Amount Saved||After 3 years||After 5 years|
See how quickly your money grows over time, just by establishing a consistent pattern of putting away a portion of your income on a regular basis (and this is without interest!). Personally, I like to deal with percentages when saving money. This allows me to easily compute what the amount should be no matter how much I make.
Won’t you set a goal today, to save a percentage of your income each time you get paid.
Submitted by Thomas Thompson, Little Black Village contributing writer