Savings - Part 2

Robert Kiyosaki teaches people to take calculated risk, leverage good debt, and think like a business owner so they can stop relying on a job for income. Dave Ramsey, on the other hand, teaches people how to create financial health with less risk, get rid of debt, and create a healthy retirement income for themselves without relying on employer contributions. 

Ramsey talks to the working man or woman who has little resources, no desire to start a business, and an oppressive amount of financial hardship to deal with. He shows them how they can be debt free, gain a better sense of security, and prepare for retirement, all on the income they're currently drawing. For that reason, he is naturally a more conservative voice financially. When Ramsey talks about your savings account, he addresses it as something you should be putting as much as you can into as often as you can spare it. Rather than make it a priority over paying basic bills, he teaches that it's a project you chip away at a dollar or two at a time if you only have a dollar or two to spare. 

Once you have your savings account built up, he recommends that you leave it alone. Just let it sit there until you have a real emergency that you can't otherwise handle with your budget. Then, put every extra dollar into your savings to build it back up again. 

We'll talk more at length about Ramsey's methods when we get into dealing with debt, since that is his main focus in his teaching. 

Whatever method you're using, saving is important. Having a savings account provides the cushion to fall on if something unexpected happens so that the little hiccoughs in life don't completely destroy your financial stability. Experts agree that this cushion should be - at minimum - six months' income. Some say never stop adding to your savings, some say cut it off and add money to some other fund or project after you have your six months' income. 

I, personally, think that you should always be adding to your savings account. Ten percent of your income, off the top, should be going into an account for the unexpected and I believe that you should do this throughout your whole life. Ten percent to God, ten percent to savings. After all, you give that much to the IRS, why wouldn't you put it toward your future. 

In all fairness, I have to admit to you that Jared and I are pretty horrible about this one and currently don't have a dime in savings. Today's action step is for me more than it is for you, but I'm sure you'll benefit from making and following a savings plan just as much as I will.