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  • Writer's pictureRaoul

Think of the future and invest today

It's not that hard to set yourself up for future wealth. Saving money does not have to be an exercise in total self-denial. To set yourself up with savings that grow, take steps like these: Drive a late-model used car instead of a new one. Don't buy or rent a place that's larger than you need. See the latest movies at a matinee for $5 instead of at the evening show for $15. People who have the most money often look like they don't have much, say financial planners. The ones with fancy cars and elaborate homes are often knee-deep in debt. It's especially important to save when you are young. A 25-year-old who saves $5 a day will accumulate $500,000 by retirement time (at 8 percent interest). A 35-year-old will save only half as much with his $5 a day, says Beth Kobliner, author of Get a Financial Life: Personal Finance in Your Twenties. Riding in a car pool, packing your lunch, and washing your own clothes can result in a big financial payoff over the course of a year. But, says Kobliner, money disappears in small places. By tracking expenses for a time, you'll know where you can save more. Other good ideas: * Automatic deduction. Have savings deducted from your paycheck. Place them in an IRA or 401K for tax savings. Once you can save a little more, arrange to have mutual fund companies deduct a regular amount from your checking account. * Search for low-expense mutual funds. Find an expense ratio of less than 1 1/2 percent. * Set up an emergency fund equivalent to at least three months' salary. If disaster strikes, you won't have to dip into long-term savings. * Never carry a lot of cash. It's harder to track and easier to spend. * Pay bills on time. Late charges on loans, fines and fees for income and property taxes can add up to a great deal of money.

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