At 26 years old, Norwegian heiress Alexandra Andresen is worth an estimated $1.2 billion dollars, making her one of the youngest billionaires in the world. But despite her riches coming from being gifted 42% of her father’s investment company Ferd, the equestrian champion knows how to save money. (Looking to save money too? High-yield savings accounts are now paying far more than last year, and you can see some of the best savings account rates available now here.)
“I save when I get my weekly allowance, and I save the cash prizes I win in competitions or if I get money as a gift for my birthday. It means I can buy myself things I really want, like a bag or a pair of shoes, without having to ask mum or dad for money,” Andresen told the Independent in 2016. And two years before, she said, “I actually save all the time, I have always done [this].”
Particularly as concerns of a recession loom, experts say that saving is essential, even if you don’t have millions. Indeed, given this economic climate, Suze Orman recently upgraded her savings advice to 12 months of expenses in an emergency fund, up from her old advice of eight months. “Inflation is front and center wherever we turn. The cost of groceries, filling up the gas tank, and paying the utility bill are all a lot more expensive than they were a year ago. Those of you who rent are likely facing much higher renewal rates.I am sorry to say that all of that might mean you should consider boosting your emergency savings fund as well,” Orman wrote on her blog. You can see some of the best savings account rates available now here.
And for his part, Dave Ramsey recommends roughly 3-6 months of expenses in an emergency fund. “This number is going to look different for everyone. The easiest way to figure it out is to ask yourself this: If I was out of work, how much money would it take to get me through three to six months? Think of things like the necessary, regular expenses you have (food, housing, utilities, transportation, etc.) and not the $400 you’d like to spend on a free-for-all shopping spree—that doesn’t count,” he writes.
So how exactly do you save “all the time” like Andresen does? One simple strategy: Make it automatic. Put some part of your paycheck automatically into savings until you have hit your emergency fund goal, pros say.
“There will be times when it seems impossible to save, so by setting up automatic systems like having a percentage of each paycheck go directly into savings each month, this will enable something to both save and invest minimal time to build up an emergency fund and set aside money for a rainy day or a financial goal,” says Bobbi Rebell, author of the parenting and money book Launching Financial Grownups and personal finance expert at Tally.
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