Saving is hard. Especially for those of us who are prone to instant gratification. It is all too easy to spend that dollar on a delicious candy bar today and forgo the savings tomorrow. Below is a little article written by Spencer Sherman and Brent Kessel. The statements below really help put saving in perspective.
It is useful to keep in mind that the biggest determinant of financial success is your level of spending relative to your income and/or assets.
The reason is that you need about $20 saved in an investment portfolio for every $1 you're going to spend once you stop working and your earned income stops. So if you cut your spending by $1, you've actually just lowered your required savings by $20.
For example, if you can reduce your annual spending from $36,000 to $34,800 or by $1,200 ($100 per month), you've decreased your required savings by $24,000. Instead of needing a nest egg of $720,000 (twenty times $36,000), you only need $696,000 (twenty times $34,800).
How do you reduce spending by $100 per month?..... Keep reading Thrifty Thursdays! Every week we will be posting a savings tip that you can really use.
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