What are some other strategies to assist us in saving money?

Some of the best strategies employed to assist us in saving money include: knowing where you are in terms of our income/expenses and net worth today, and creating a goal with a time frame of where you wish to be. Caring about saving even small amounts gives you the practice and trains you to have the discipline to save and care about larger amounts. The very act of keeping track of our spending will cause many people to begin to see how they can cut their expenses, by not purchasing on impulse, comparison shopping for lower prices, decreasing the usage of credit/debit cards, and creating and sticking to a monthly or weekly expense budget.

Why should I get in the habit of paying myself first?

In light of everything written above, it is important to create the behavior of paying yourself first. This means setting aside money from your normal weekly or monthly expenses that you use only for your savings and investments. Even if it is a small amount, it is important to set this money aside first so that it is not redirected to meet other expenses.

What is a "cash cushion"?

A cash cushion is a special savings that you may cover three months to one year of your expenses. The amount you need to accumulate depends on knowing your current expenses. The amount you need to save is also dependent on your ability to find another job should you abruptly change employers, which may be several months, or even years. So it is good to plan accordingly.

Why else should I have a portion of my portfolio in cash?

Many experts believe that holding a certain percentage of your portfolio in cash has many benefits for investors. Although it is important always to have a certain amount of cash on hand for emergencies or unplanned expenses, you should also have cash on hand to acquire investments when the opportunity arrives, so you do not have to sell other successful, longer-term positions—and pay the capital gains taxes—in order to purchase more investments. You


Don't have all your money tied up in bonds and stocks; keep some in cash for emergencies so that you have it available for unexpected investment opportunities.

can simply use cash. Other experts believe in holding a certain percentage of your portfolio in cash as a way to preserve your capital in a down market. Cash also increases value over time during periods of deflation. When purchasing a house or other real estate investment property, using cash to increase your down payment may enable you to obtain better terms on your loan and to make a more attractive offer for the property.

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