After her bookkeepers pulled her aside, supermodel Tyra Banks – worth an estimated $90 million – realized she made the move ‘in error’. Ironically, some experts say it’s a mistake you should make too
Tyra Banks is worth about $90 million, according to arrive CelebrityNetWorth.com, but the supermodel and businesswoman, who grew up with every penny, admitted to Money.com that she has trouble spending her money and is indeed ‘faulty to save’. But while she may have saved too much, experts say saving more is something most of you should really be trying for. do (and thanks to many savings accounts that pay more than they have in about a decade – See the highest paying savings accounts here – saving is now more lucrative).
“I have always been conservative. I’ve always been more interested in the experience than anything else. Everything did not satisfy me. I saved, saved, saved. But I saved the error. About 15 years ago my accountant pulled me aside and they were like ‘Tyra. You don’t spend money. No. You just give it to the government. You need to spend some damn money! ‘ So we created something called ‘account F’. It’s a “vanity account.” And I had a budget to spend frivolously for the year, year after year. I need that to feel safe, “Banks told Money.com.
This begs the question – how much is too much to save? Some advocates say shut up and don’t worry about it, but others say you can save too much.
In the old camp is certified financial planner Gretchen Behnke of Pearl Financial Planning, who says saving too much is not a problem to deal with. She points out that most people need to save more, not less. Real one A recent Northwestern Mutual survey found that Americans believe they need $1.25 million in savings to have a comfortable retirement, but in reality, the typical US retirement account is only 86,869 dollars.
And certified financial planner Steven Gilbert of Gilbert Wealth says the question here is really, how much is too little for saving. “If you’re planning to retire early, start a business, or are playing catch-up with your savings, it’s important to save actively,” says Gilbert. Furthermore, if your goals change, you can always reduce your gas mileage, but if you don’t save enough, you’re putting your future in jeopardy. (See the highest paying savings accounts here.)
And even if you do save a ton, you can find a way to use it: “Most of the time, people are spending too much, but if someone has enough savings, let’s say 20 times that. their annual needs upwards, they use excess funds. for activities they’ve worked on all their lives,” says certified financial planner Andrew Feldman or AJ Feldman Financial.
Maybe you’re saving too much?
That said, if you’re saving too much that’s making you miserable – or causing you to miss out on important life experiences – then you might want to see what’s really going on. Experts say some people save from a place of financial anxiety and spending more could be the treatment – an affirmation that they have enough.
“If this will help you lead a happier life, it may be time to spend more and save less. It’s counter-intuitive, but many people can reduce their financial worries by spending more,” says certified financial planner David Born at Private Financial Management. However, Born says the safety and joy of building [wealth] and maintaining a large nest of eggs is sometimes the biggest use of money.
And certified financial planner Chris Chen at Insight Financial Strategists says he likes to tell people that money has only one use: It’s for spending. “Your choice is today or tomorrow, yourself or someone, like your child. Yes, saving has a purpose like retirement, buying a house, or sending your kids to college.” So, if you’ve taken care of all of your goals, planned your contingencies, and feel like you’re not spending the way you want, it might be time.
How much should you personally save?
For one, nearly everyone needs an emergency fund of about 3-12 months for essential expenses. “Save at least what your employer is offering in a match. If you’re under 30, save into a Roth account because your peak earnings years are still ahead of you, intentionally save 50% on every raise and if you’re in the higher income bracket, go for it. Set your savings bar even higher,” says Gilbert. (See the highest paying savings accounts here.)
Also, it has a lot to do with life goals, says Chen. What do you want retirement to look like, do you want to buy a house, do you want to leave your children an inheritance? “What do they want to do and not for whatever reason? Once we have defined life goals, we can align financial goals with life goals and then the focus will shift from saving, investing, and spending to living life,” said Chen. speak.
Or as certified financial planner Steve Zakelj put it: “It doesn’t matter whether it’s Tyra Banks or Joe the Plumber, we all need to decide on our financial goals and then create a plan together. to achieve them.”
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