Wednesday, November 15, 2006

Six simple Saving Scheme

(Save yourself - The Art and Science of Saving)

1. Think of saving as a fixed monthly expense. Saving is sometimes you must do, like paying your mortgage, even it’s only a small amount every month. While there is no magical number for how much you should save, 10 % of your monthly income is a realistic amount to aim for. If you manage to save more than that, all the better. some financial profesionals recommendedthat you put 10% into your retirement scheme alone, and another 5% into a saving account.

2. Use the money in your current account to pay your daily living expenses, and keep the money in your savings account sacrosanct. You should aim to built up a cushion of no less than three lonts income in your savings account, for emergencies.

3. To make saving easier, enroll in a savings plan that automatically deducts money (the amount is determined by you) from your current account each month. That way, you wont be tempted to spend it.

4. Dont save your hard-earned money under the matress, where a mouse or a burglar might find it. Isstead, invest in a pension scheme, like KWSP.

5. Invest in a money market fund. Nearly as save as bank’s saving account, these funds pay a higher interest rate. You can buy a money market fund through a unit trust company, a brokage firm or a bank. And you can have monry automatically drawn from your pay cheque and in the fund before you get your hands on it.

6. Set a saving target for the year - 10% of your annual income, at a minimum - to give your self something to aim for. If you reach your goal early, treat yourself. Spend your equivalent of you put away each month - new (not saved) money - on something you really want. It isa treat that you have earned.If you dont achieved your goal early, bear down and keep saving until you do.

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