Even if you are committed to saving money, you may find yourself falling into the trap of spending an extra $5 here, or $10 there, thinking, “It’s not that much. I’ll never miss it.” Depending on your age, this could be a huge mistake.
One of the cornerstones of saving money is understanding the time value of money, that is, the concept that $1 today is more valuable than $1 a year from now. This one money saving tip could help you transform your balance sheet over the next 10 years as you free up cash to put into reserves.
The longer your money has to grow, the better for you.
While that’s true in a general sense, the amount of money you need to save depends on your needs, lifestyle preferences, and income.
The amount you need to save and have available in the event of an emergency or golden opportunity could be very different from your friends, family, and neighbors.
The general rule of thumb is to have three to six months of living expenses saved in an easily accessible account.