I think we all know that tucking a little money away is a good idea. But a better idea is to set guidelines for yourself by creating a budget. For instance, put 3-6 months worth of expenses in an emergency fund. The emergency fund will help if you ever need to keep paying bills when your cash flow has stopped.

If you have a job that is your primary source of cash, set aside some money until you can cover the expenses for that 3-6 month period. That way, if something were to happen to your job you have a little bit of breathing room. No panic mode necessary!

If your parents give you money to cover expenses it’s just as important to save. You will be prepared for any possible situations that may arise!

It is good to learn to save while you are young so you are already in the habit of budgeting money.

Once your emergency fund is established LEAVE IT ALONE!! Movies and Pizza with the crew is not an emergency, a trip to the beach is not an emergency, and the best deal ever on the newest phone is not an emergency. Save for these purchases in addition to the emergency fund.

Need more information on saving or budgeting money? Call your nearest Central National Bank to locate your own personal Financial Wingman!

$$        After discussing Roth Individual Retirement Account’s (Bank Lingo Roth IRA’s) with an investment professional today, I realized I could have been a millionaire!  Don’t get me wrong, I’ll take the $839,343 I will probably make off of the IRA I began at age 25.  However, had I started putting three-thousand a year in at age 21, with an average return of eight percent, I would have ended up with $1.1 million.

Sure it’s hard to save when you are young, but it’s worth it if you can.  How can you?  You have to think about items you could cut down on or cut out of your life.  I tried to think of something lots of young 21-25 year olds spend their money on.  One common item could be alcohol.  Now this is a hypothetical, but say you buy a 20-pack of beer every weekend at the cost of $15.  If instead of investing $720 a year on beer, you invested it in a Roth IRA.  After 40 years your beverage investment of $28,800 would be worth $201,442.32.  That is at a conservative eight percent return.  The stock market, on average, over any 10 year period since 1926, has had an average return of 10%.

I’d strongly recommend meeting with a financial planner and discussing investment options.  They can plug in all kinds of numbers and tell you what various amounts over various time periods can yield you.  Nobody likes to think about being 65, but if you have to be 65, why not be 65 and Rich? $$

Please join us in welcoming newest addition to the Central National Bank web site–CNB Student Life!  CNB Student Life is our new blog that will provide helpful financial tips and knowledge, in-depth information on Central National Bank products and services, and much more useful (hopefully!) information directed at college-aged adults.

Feel free to join in on the action by posting your own comments by clicking the link at the bottom of any post.

Check back soon for more blog posts!