Question: I’m in my 40s and have for the past 15 years saved a sizeable amount, however, in one bad investment lost nearly all of it. I even lost my job, now I’m in a low paying job (secretarial), please advise how I can start again. Just thinking of all the meticulous saving and budeting I did all these years leaves me depressed! Carmen

Answer: Hi Carmen, my condolences on the loss of both your investments and your job. That’s a really tough spot to be in.

From your question, you already know the answer here. Start saving again! The longer you stay in the depression about it the less time you will have to actually do it and the more disempowered you will feel.

The lesson here may be in how you handle your portfolio in the future. There are a number of strategies which can protect you from near total loss: these include diversification, determining what percentage of your portfolio you want in different instruments and staying with those percentages (this is especially hard to do when things are going up, up, up), having stop/loss orders on stocks, etc.

Warmly, Cindy

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Restarting After Job Loss and Bad Investment

Question: I have a financial question (this is one of those ones I think I’m “supposed” to know the answer to, and yet, I don’t, and I’m having trouble finding someone who does know the answer, so I thought I’d ask you. When budgeting books and programs say “Pay yourself first” what does that mean? Does it mean pay your savings account and keep it there? Give yourself treat money to go spend? Pay your rent before paying anyone else who might want your money? Buy food before spending more money on your buisness? I keep running into that phrase, like I”m supposed to know what it means, and I simply don’t know and no one seems to be explaining it. If you’ve got an answer, I’d love to hear it! ~ Marianne

Answer: Hi Marianne, I’m sure you’re not the only one who has this question!

“Paying yourself first” is putting away money for your Financial Freedom/Retirement.

This would include money saved in an IRA, 401(k)/403(b), SEP (for self-employed people) or a Roth IRA. This money will begin working for you in the form of compound interest, dividends, interest and investment growth (depending on what you invest it in). That’s how people really get wealthy — making their money work hard for them instead of working hard for their money!

A recommended percentage is 10% or more. Of course, you want to have your debts paid off, too. After that you can set aside money for other things you want or to play with as well as necessities, etc. Women are encouraged to set aside 12% because we often make less, take time off for kids and parents and live longer.

The best time to start saving for retirement is the day you get your first job, the second best time is right now!

Warmly, Cindy

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What does Pay Myself First really mean?