Savings Basics

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It's harder to save money if you think you can't save, are carrying a heavy debt load, don't know how to begin saving, or haven't thought very much about the positive impact "money in the bank" can have on your overall financial security. Many people feel like there just isn't "enough money" to pay bills, let alone think about saving money for the future. Having money in savings helps to build financial security. Without money set aside for the future, it will be difficult to meet emergencies; pay large, infrequent bills; or build resources for important longer-term goals, like a car, a home, a college education, or retirement.

This chapter will help you learn:

• why paying yourself first is an important strategy,
• how to establish an emergency fund and a set-aside account,
• how to select savings options that make sense for you,
• why the time value of money is so powerful,
• and the difference between saving and investing.