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Making Sense of Savings

When it comes to saving I’ve never been all that great.  But I have always known and understood the importance of the basics:  and that is, sticking to the 50/30/20 rule:  (50 percent for essentials – which does not mean my wine club!; 30 percent for discretionary spending – which really should be connected to my kids’ needs; and 20 percent for savings).

So I started thinking about reading what some of the experts have been saying for the regular man in the street to get their finances in order.  I came across something very interesting from James Sullivan of Essex Financial Services and I actually really related to what he said.  He believes that everyone really has to establish their very own “savings hierarchy,” which means that even though we all know about the 50/30/20 rule, there is a lot of wiggle room within that.  We should still stick to the principle, but depending on our specific circumstances (some people work for places with a company match) before we put all our eggs in one basket for example.

The other idea I gleaned was that apart from looking at our current tax brackets, we should investigate our potential future ones and based on that information look toward our savings plan.  And keeping all contributions in one account just makes things a lot easier and less stressful to manage.

So I will really try to make sure 20 percent is put toward savings and, when I do, go back to people like Sullivan for more specific tips on how to engineer this.