Financial Tips: Saving

Save. Yes, it’s a “four letter word” for many people. I’m a saver by nature. I’m not sure if it is my independent, I-want-to-do-it-myself nature, or just the planner (uh hum, worrier) in me. It could also be that I am a single woman and want to have a safety net if, and when, it is needed.

Before we begin, I realize saving can be a sticky issue if you receive government benefits. If you receive SSI, you cannot have more than $2000 in assets since it is a need-based program. On the other hand, to qualify for SSDI, there is no limit on assets since you have paid into the system.

With that being said, how do you begin saving? First, get out of debt and stay out of debt. Don’t be paying interest on credit cards or student loans. Pay. It. Off.

Then begin by starting an emergency fund of three to six months’ salary. If you get laid off or cannot work temporarily, you will have several months to get back on your feet (or wheels). The wisdom of having an emergency fund saved me seven years ago when I resigned from one job without having another lined up yet. I did not go into debt during this period by using my emergency fund for groceries, mortgage, gas and health insurance, and by canceling my internet, cable and all other “unnecessary” expenses until I was working again. The emergency fund can also cover unforeseen household and medical bills. (And just to clarify: this is an emergency fund. Vacations are not emergencies and should not be paid for out of this money.)

Once you have an emergency fund established, start saving for retirement. Social Security benefits are not meant to serve as retirement. It supplements retirement. Ten to 15 percent of your income should be saved toward retirement. The earlier you start the better, due to interest and time. But if you are starting late, save as much as possible.

Whether or not the loan for my vehicle is paid off, I choose to always have a “car payment". In my state, Vocational Rehabilitation will only modify a vehicle with less than 30,000 miles on it. A new or almost-new van is a chunk of change. For my previous two vehicles I had decent down payments saved up so I could afford the monthly car payment. Both times I paid the loans off early, but continued putting the “car payment” into a savings account for the down payment for the next vehicle. It is simply a permanent part of my budget.

I will never have the amount of money the so-called “experts” tell me I need in order to retire. In addition, in observing those with spinal cord injuries who are fifteen or twenty years older than me, I realize I probably won’t be able to work full-time until I’m 67 when I would become eligible for Social Security.

So, when looking at the big picture of my finances, I figure I have three options:

  1. I can still hope to marry rich. (I’m not placing any money on that one.)
  2. Die early so retirement isn’t an issue. (Fortunately/unfortunately life spans for people with SCI are about the same as the average population now.)
  3. Save what I am able to and simply trust God to provide and thank him that I have always had what I needed. I hope that I am focusing on this third option.

Good luck and good savings! Jenny

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