We talk a lot about the importance of funding your Rule Two categories because it is really important.
Quick Review For The Uninitiated
Quickly, if you are new to the Wonderful World of YNAB, Rule Two: Embrace Your True Expenses, is all about anticipating larger, less frequent expenses, and saving for them on a monthly basis.
For example, if you think you’ll spend about $1,200 over Christmas this year, then you should be saving $100/month for Christmas. Treat it like a monthly bill. Put that money aside every month, and come December, you will have all the money you need, just sitting there, waiting to do its job.
Same goes for insurance premiums and car repairs and vacation and a new car. You might not know exactly when you will need the money, or exactly how much you will need, but you know it is coming, so start saving. Every month.)
The Ultimate Rule Two Expense
Ok, now that we are all on the same page. We talk about Rule Two all the time, but we don’t talk much about the ultimate Rule Two expense: retirement.
If you are drowning in debt, or barely getting by paycheck-to-paycheck it feels impossible to think about retirement, and maybe that is why we don’t talk about it more. But we should.
Some of the money you save every month should be to help you become wealthy. You want to build a little wealth and grow a little nest egg—you want to retire someday, right?
Over the years I’ve found that when it comes to investing, getting started is the hardest part. (In fact, I wrote a book about it called Invest Like A Pro. It’s on Amazon—they won’t let me give it away free, but I made it as cheap as I could—because it isn’t as complicated as people think. And I want to help you get over the initial fear and just start.
The Simple Path To Wealth
But what got me thinking about all this today, is a good friend of mine, J.L. Collins just wrote a new book called, The Simple Path to Wealth and his is much better than mine.
Anytime someone asks a question about what to do with stocks I send them to Jim’s blog. If there is anyone that can calm you down, as it relates to market movements and what you should be doing, and not needing to be worrying about this or that, the appropriateness of diversification, and honestly, how drop dead simple investing can be, Jim is the guy.
This is his best writing on investing, how to get started and how to keep going. The content is phenomenal. Investing in stocks is just one part of the equation as it relates to personal finance, but it is a big part.
Retirement is a different dream for everyone, but I just want everyone to retire with a little dignity and be able to do it on their own terms.
It’s a discipline to think about something so big and vague and far away as retirement but time is on your side. Start. Just set a little bit aside every month and get it going, working for you and your future.