By : AMOD KUMAR YADAV, Manager - Projects Sales & Marketing, RDK INTERNATIONAL LIGHTING LLC
Industry : Investment Banking
Activity: 0 comments 399 views last activity : 07 06 2010 
By : AMOD KUMAR YADAV, Manager - Projects Sales & Marketing, RDK INTERNATIONAL LIGHTING LLC
Industry : Investment Banking
Activity: 0 comments 399 views last activity : 07 06 2010 20:18:04 +0000
Most of the youth doesn’t understand the importance of saving. They earn just to spend, majority of the time their spending will be more than their earnings. Dependency on Credit Card is very common among them but it is the time to understand the defects of credit cards. Saving is an essential step on the way to financial well-being, both in the short term and in the long term. In the short term, it gives you an emergency cushion in the event that an unforeseen, large and urgent expense occurs. In the long term, a consistent pattern of saving can facilitate you to accomplish your financial goals, such as financing college education, Home Purchase, or Retirement. If more money comes in every month than goes out, then you are saving. If not, head over to the credit and loans section. If you are not sure, take a look at your budget. If you are in debt, you should start saving to pay it down (especially if it is debt at a high interest rate, such as on a credit card). Once you are free of high-interest debt, the next step is to build up a cash cushion to protect you from emergencies, such as a layoff or a Medical expense.
How much should you build up and set aside? We recommend that you must build up a savings of 30% of your annual income. The right amount for you will depend on the following:
Some people feel that they don't need this cash cushion, they believe that they can just run up credit card debt if they are in need. While this may be true, taking on Credit Card debt is a dangerous trap to fall into, because the high interest rates make it difficult to escape from. Additionally, saving the money is a great idea even if you don't need it for an emergency, because then you will be able to use it toward your long-term financial goals. Others say that they have stock and could just sell it if they needed. Again, they are correct, but the downside is that circumstances might force them to sell the stock even when they don't want to.
As you build up your emergency fund, and even once you have finished buildin