It has been said many times by financial experts that we should pay ourselves first before all other debts. This philosophy will ensure that money is put away in savings before it is consumed by living expenses. The habit of saving is one that should be developed even before paying down consumer debt. Once the practice has been established and there is at least one month of living expenses in a savings account, then eliminating consumer debts can be the primary goal. However, if saving is forgone and paying down debt is the only focus, there will be no cash reserve to ensure you don’t fall back into the debt trap when unexpected events occur.
A healthy rule of thumb is to save 10% of your gross income. If managed safely and conservatively, this should provide for a healthy retirement when the time comes. The most difficult step is always the first. Remember, it isn’t about the size of the savings you begin with; it is about the habits you develop that will benefit you the most in the future.