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Don’t get soaked financially

June 10, 2012

Don’t have enough money in your “Rainy Day Fund?” Emporium-based CPA and Certified Financial Planner Robyn Kuleck (www.kuleckfinancialplanning.com) has some recommendations to help people prepare from getting soaked.
In addition to tracking spending habits to make adjustments where needed and putting whatever amount of money you’re able to afford into savings before paying other bills, Kuleck said there are some other methods of saving that can allow people to save without too much pain.
“You may get a raise, and instead of incorporating that whole raise into your spending, put some of that raise aside for your savings as well,” Kuleck said.
With the nonprofit Corporation for Enterprise Development (CFED) reporting that Pennsylvanians carry an average of $10,000 in credit card debt and more than half have subprime credit, Kuleck said she understands that not everyone can put aside money when they are trying to pay off existing obligations.
“A lot of folks are in debt. And it seems counterintuitive to be saving while you’re in debt. So if that’s the case, set the goal, ‘When my debt is paid off, I will save,’” Kuleck said. “What you can do is, once your debt is paid off, just continue making those payments to a bank account.
“[Your mentality will be] ‘I get excited.’ I think, ‘I am building wealth. I am building security.’
She said once people begin to acquire some savings, there is almost “no wrong way to save—except for putting your money under the mattress.”
“If you’re able to save anything at all, you want to put it somewhere where it might earn you some additional interest,” Kuleck said.
Kuleck said while savings accounts are great, the money can be spread out a bit to help generate more interest, and not all of a person’s savings need to be immediately available.
“For an emergency fund, you don’t need to keep a full balance in the same account,” Kuleck said, adding that some savings, maybe some CDs, and even U.S. Treasury bonds can be a good fit.
“They’re [bonds] just as safe and secure as a savings account,” Kuleck said. “They’re offering a little more interest right now than savings accounts.”
Adding to the “pay yourself first” is the “out of sight, out of mind” principle, Kuleck said. She said when faced with a stack of bills, people can become anxious and forget to devote a portion of their pay to their savings.
“Sign up for direct deposit, and your employer sends the money to whatever institution you want it to go to. And that relieves you of the temptation not to save,” Kuleck said.

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