Smart moves to maximize your Tax Refund

1. Start an Emergency fund. If you don't have an emergency fund, strongly consider opening one and depositing your windfall for a rainy day. While it might not be enough to create a full- fledged emergency fund, it'll be a good start.

2. Pay down your debt. Whether it's credit cards, an auto loan, or a student loan, you need to get that monkey off your back. So add your windfall to your debt snowball and keep on digging.

3.Adjust your withholdings. You should consider adjusting your withholdings so you don't end up giving the government an interest free loan during the upcoming year.

4. Up your current saving rate. Most American are not saving nearing enough for retirement. Although 10% is a good starting point, you should keep increasing your saving rate until you are near 30% saving rate.

5. Look into Increasing your protections. Make sure all your protection are in order. Health, disability, home, auto, and life insurance. If you are not properly protected everything you are building and saving for can be taken or lost in an instant.

Any questions or comments, please feel free to respond, post in comments or call us at 347-661-6234

The Simple Financial Plan for City Workers

The Simple City Worker Financial Plan

These 7 simple steps are the basis for creating a solid financial plan for you and your family. Many individuals and families are reluctant to start the process of reviewing their financial situation because they feel it is very time consuming and can become a very complex process. This is why I have created these 7 steps to start you on the right track and make the process simple and more enjoyable.

1. Protection First - Full Replacement / Lifetime Protection

  This refers to having all your Insurances (Health, Life, Property & Casualty, etc.)
  reviewed. Without the proper protections (foundation), everything else you build
  can be taken lost or  taken away.

2.Eliminate Bad Debts

   Remember keep it simple, get rid of CREDIT CARD Debt.

3.Create A Budgeted Lifestyle

  This means learn what $ is coming in, and what $ is going out each month.
  Truly live within your means. Be true to yourself and your family.

4.Increase Your Savings

  Pay yourself first, build a simple saving account/ money market account. This step may
  take some time, but it is well worth it. This will help you stay liquid, also having available
  funds on hand with no penalties and no fees. Very Important !!!


5.Reduce Tax Exposure

 This step involves reviewing your your overall finances with a financial planner and
  your CPA (accountant).

6. Minimize Risk

   This is where you should be gaining your education/ knowledge on how risk and
   reward can benefit you  or can hurt you. A basic understanding is needed for this
   step to evaluate your needs.

7. Overall Rate of Return

   Although this is a important step, it has been proven that if put number 1, you are
   chasing returns. Which means you are assuming a certain percentage to assure

   you and your family a safe and happy future. Again you will be LUCKY if this

   works for you. Saving on a consistent basis will give you and your family a safe
   and secure financial future.

   ALTHOUGH SIMPLE, THIS PLAN HAS
  BEEN STRUCTURED TO MAXIMIZE
  LASTING WEALTH WITH CERTAINTY
  NOT LUCK!!!

PLEASE CONTACT VINCENT (347-661-6234) TO SET UP A APPOINTMENT
TO DISCUSS HOW THIS PLAN CAN WORK FOR YOU AND YOUR FAMILY.

Competent Decisions Around Life Insurance

Competent Decisions Around Life Insurance

By Vincent Lanzante  “The Financial planner for all city workers”

The majority of people who buy life insurance do so because of a recent life event; marriage, pregnancy, having a new-born, etc. This moment marks the starting point of one of the most important decisions you will ever make. The two main concerns around purchasing life insurance is first, the amount, and second, the type.

The amount is calculated based on your current age and income, this is known as your Human Life Value.

The type of insurance is more complicated. Choosing the wrong kind of life insurance can do more damage to your financial plans than just about any other financial product today. Let’s take a look at the two main options of life insurance; term or permanent.

Term life insurance is pure insurance. It is the same concept as home owner’s insurance. If damage happens to your home, you are covered. Term life policies offer death benefit only, so if you die, you win (so to speak). If you live past the length of the policy, your beneficiaries get no money back.

Permanent life policies offer a death benefit and a "savings account" so that if you live, you get back at least some of, and often much more than, the amount you spent on your premiums. Depending on the company you choose to purchase your insurance from, these policies can be very flexible in the way you pay your premiums and access your cash values. The most important component of permanent life insurance is that it is permanent. Having a permanent, tax-free, guaranteed death benefit paid to your family on the day that you die provides several options in retirement that you wouldn’t otherwise have.

The saying you always hear is, "buy term and invest the difference." This ‘common’ belief has been detrimental to the majority of retirees today. In order to make confident decisions around purchasing life insurance, contact a competent financial professional that specializes in this area.

Everybody wants Whole Life Insurance (They just don't know it)

As the days pass and the turmoil continues I cant help but think how so many people are being affected now and forever by this global economic crisis. I also ponder why so few know about a very viable financial option that can help so many individuals and families have a very safe, sound and secure financial future. The article below will hopefully help you understand that there is a safe option other than putting your financial future in the hands of the Wall Street Barons. The article is a little lengthy, but worth reading if you care to educate yourself on  the options you may have to avoid a economic catastrophy for yourself and/or your faimily.

Everybody Wants Whole Life Insurance

(they just don’t know it)

By Michael Fliegelman, CLU, ChFC, AEP, RFC

On some financial topics, people have become so conditioned to seeing things from a single perspective it makes them incapable of recognizing other – perhaps even better – ways of addressing these issues. The on-going fallout from the “meltdown/crisis/recession/ global-economic-funk” offers a striking example of an obvious solution that almost no one seems to see:

                         For one reason or another, everyone wants whole life insurance.

Don’t believe it? The disbelief just further proves the point. Whole life insurance is so far outside the awareness of both average Americans and the mainstream financial press that collectively “advises” them, that they have become blind to what’s been there all along. Think about it. As various “better ideas” have fallen short of expectations or been unable to respond effectively to new economic realities, have you heard any experts, commentators, or consumers clamoring for whole life insurance as a viable answer?

And yet, the following news items and commentary make a compelling case for seeing whole life insurance for what is really is, and why everyone wants it – even if they won’t admit it.

               Do Americans want a 401(k)…or do they really want Whole Life Insurance?

Here are some excerpts from a January 8, 2009 Wall Street Journal article by Eleanor Laise titled “Big

Slide in 401(k)s Spurs Calls for Change.”

After watching her account drop 44% last year, Kristine Gardner, a 35-year-old information technology project manager in Longview, Washington, feels no sense of security. “There’s just no guarantee that when you’re ready to retire you’re going to have the money,” she says. “You either put it in a money market which pays 1%, which isn’t enough to retire, or you expose yourself to huge market risk and you can lose half your retirement in one year.”

Many retirement experts have come to a similar conclusion: The 401(k) system, which has turned countless amateurs like Ms. Gardner into their own pension-fund managers, has serious shortcomings.

When 401(k)s were first established in 1978, one of the selling points was the opportunity for individuals to participate in the uncertain (but historically profitable) market fluctuations. However, as Ms. Laise notes, “a market meltdown near the end of their working careers can …blow their savings to smithereens.” Quoting Alice Munnell, director of Boston College’s Center for Retirement Research:

“That seems like such a fundamental flaw. It’s so crazy to have a system where people can lose half their assets right before retirement.”

In response, Congress has begun looking at ways to overhaul the 401(k) system. How? Among the proposals: government-supervised universal retirement accounts offering a “guaranteed, but relatively low, rate of return.” Another idea is an index fund of stocks and bonds whose mix becomes more conservative as workers near retirement age.

But there’s more to the 401(k) issue than just guaranteeing a retirement balance. Ms. Laise shares the experiences of another individual:

Peg Kelley, a 58-year-old small-business consultant in Watertown, Mass. didn’t contribute anything to her 401(k) last year. Instead, she’s been focusing on paying down credit-card debt and building up an emergency reserve in case the bad economic times turn worse. She’s also still paying off an $8,000 loan she took from her 401(k) plan four years ago to buy a new car.

After reliving the dot-com market meltdown, which knocked $100,000 off her retirement savings, she moved her entire 401(k) from diversified stock and bond holdings into cash-like investments early last year.

“I’m not going to get rich on my 401(k),” she says, “but also don’t want to get poor because of it.” She had hoped to retire early, but now figures she won’t quit work before age 65.

In both Ms. Gardner’s and Ms. Kelley’s comments, 401(k)s seem to present a number of “either/or” financial decisions. Ms. Gardner sees her investment options as either a low-yielding money market account or “huge market risk.” In a roundabout way, Ms. Kelley agrees, seeing her choices as either not getting rich, but at least avoiding poverty by choosing lower-risk, lower-return financial instruments.

When it comes to extra funds, Ms. Kelley has to choose either pay down debt and build emergency funds, or contribute to the 401(k). And because of other financial needs, Ms. Kelley has already borrowed from her 401(k); like many Americans, she doesn’t have enough money to fund all the buckets (one for retirement, another for emergencies, big-ticket purchases, college funding, etc.) so filling one means stopping another.

If you were to summarize the comments from these two individuals, they could easily be considered representative of the accumulation issues of most Americans:

• They want some guarantees, yet want to achieve annual returns better than 1%.
• They have a need for accumulating liquid emergency funds.
• They want opportunities to access funds prior to retirement, either as loans or withdrawals.

Guess what? With some variation in the sentence structure, those very features will be mentioned in almost any insurance company’s brochure about whole life insurance! And these features aren’t either/or.

When you make deposits to a whole life insurance policy, you can address all of those issues simultaneously. Cash values can be accumulated for emergencies or retirement. The long-term rates of return on cash values are greater than the 1% low-risk options Ms. Gardner is aware of – and they include some guarantees.

In addition, many whole life policies will offer a Waiver of Premium rider; if the insured is disabled, the insurance company will pay premiums to ensure the future growth of the cash value. And in tragic situations of an early, unexpected death, the insurance benefit delivers significant tax-free dollars in a time of great need.

As a depository for tax-advantaged retirement savings, 401(k)s may fill the bill. But as more and more Americans are discovering, they want a financial multi-tool that can serve several different functions – before and after retirement. For many Americans, a custom-fit whole life insurance policy could be their ideal solutions.

  Do Americans want a “Medical Expense Fund”…or do they really want Whole Life Insurance?

What is the cost of health care in retirement? Robert Powell, in March 14, 2006 MarketWatch column said:

“A 65-year-old couple retiring today will need on average a tidy $200,000 set aside to pay for medical costs in retirement, according to an annual Fidelity Investment study released this week.”

That was almost three years ago. Does anyone think medical costs have gone down since then? No? That means the need for a “tidy $200,000” is larger today.

Powell’s column elaborated on the Fidelity report, noting that Medicare B and D premiums accounted for $64,000 of the estimated costs, while cost-sharing co-pays ($72,000), and out-of-pocket costs ($64,000), comprised the rest. The $200,000 amount also didn’t include expenses from over-the-counter medicines, dental care and long-term care, and was based on an assumed life expectancy of 85. The estimate assumed the couple enjoyed reasonably good health. Add nursing home or other long-term care expenses to the list, and the total health-care cost in retirement could be staggering. To make matters worse, expenses have been increasing at a rate of 5.8% annually since Fidelity started conducting the surveys in 2002.

Now, even if you have a couple million accumulated for retirement, setting aside $200,000 in a safe, low-return financial instrument could result in a significant decrease in retirement income. It’s another one of the either/or, lose-lose decisions. Either you lose income because some assets can’t be invested in potentially high-profit, long-term opportunities, or you lose the security of having the liquidity to meet possible medical expenses.

Guess what? Whole life insurance might offer some unique solutions to medical expenses in retirement. The cash values can not only serve as a great reserve fund, but many life insurance companies offer riders that delineate terms under which a portion of the life insurance benefit can be distributed to pay costs resulting from a long-term care situation or a catastrophic terminal illness. Further, because of provisions in the 2006 Pension Protection Act, these benefits could be received on a tax-favored basis in many circumstances. In terminal situations, the amount paid could equal up to 80% of the life insurance face amount. In chronic situations, the amount paid usually varies with the age of the claimant – the older the policyholder, the higher the percentage.

These riders (sometimes referred to as Accelerated Death Benefit riders) are not intended to serve as a replacement for the stand-alone long-term care insurance (usually the whole life rider’s definitions of what constitutes an “LTC event” for which a claim can be made are not as generous or comprehensive as those in a long-term care contract). But these provisions give the insurance benefit – not just the cash values – a clearly defined financial value before death. And, Robert Lehmert explained in the June 2006 issue of the Life and Health Advisor: “Accelerated benefit riders do not require the negotiations associated with life settlements; the formula is predetermined and the entitlements can be taken at will.”

Even better, if the Accelerated Benefit option is not used, beneficiaries will receive the full insurance benefit tax-free. That’s a win-win, either/or decision.

Lehmert goes on to note: “in an era of dramatically increased longevity, permanent (whole) life insurance has the potential to play a critical role in helping individuals live out their days with enhanced financial security.”

Do Americans want “Yeah, buts…”or do they really want Whole Life Insurance?

If whole life insurance is such a good product, why don’t more popular “financial experts” recommend it? And why don’t more people own it? It goes back to the opening comment: When someone is so invested in seeing things from one perspective, it can be difficult to see it differently, even if the alternative is supported by facts and logic. For these people, the answer to retirement is a 401(k), the answer to emergency funds is a savings account, the answer to college funding is a 529, and the answer to life insurance is term. Anything outside their framework doesn’t fit, and generates a dismissive “yeah, but…” response. For example:

“Yeah, but…” Hindsight Sees a Better Idea

By design, whole life insurance is conservative and predictable. It’s boring. Here’s what happens:

Someone looks at historical results and says “You could have done better if you had…invested in the tech stock…, speculated in beach-front condos…flipped houses… bought term insurance, etc.” Looking backward, it’s always possible for someone, somewhere, to construct a better outcome than the one you have. This is true for every financial decision, not just life insurance. In hindsight, you could have bought a nicer home on better terms, earned more with a different mutual fund, paid less for a car.

But while hindsight can always develop a better scenario for the past, hindsight insights cannot guarantee future outcomes. Two decades of historically superior returns were irrelevant when the S & P 500 dropped over 30% in 2008. So instead of looking backward to guess what might be most profitable in the future (and occasionally guessing wrong), take a look at this: the accumulation focus of whole life insurance policies is consistent, guaranteed, long-term cash value growth.

“Yeah, but….” The Costs Exceed the Benefits

No one really argues the benefits of whole life insurance; the issue is the perceived cost of obtaining them. When compared to term insurance, whole life insurance seems inordinately expensive. (Typical comment: “If I can get $500,000 of term insurance for $35/mo., why do I have to pay $750/mo. For $500,000 of whole life?”) But other than the life insurance benefit, whole life and term insurance are radically dissimilar products. In a different context, whole life isn’t over-priced.

Consider a household with take-home earnings of $100,000/yr. that is attempting to save 12% of their income (a percentage which, by the way, most “experts” say must be increased to ensure a comfortable retirement). Maybe some of that $12,000 goes to a retirement account, some to emergency savings, some to buy term insurance, and some to an after-tax college savings fund. Or instead, maybe a sizable chunk of it is applied to a whole life policy, because the whole life policy can provide cash values, which can be used for retirement supplement income, emergency reserves, money for college – and life insurance.

                  “Yeah but…” There’s Up-Front Commitment,and Delayed Gratification!

Whole life insurance is a long-term financial instrument with a long-term funding commitment.

Although a whole life insurance program can be constructed in such a way that premiums can be paid for a limited period as opposed to one’s entire lifetime, the shortest paid-up period is usually seven years. A whole life insurance purchase is big-ticket purchase, paid for over time – like a car, a home, a college education. While there is some payment flexibility in most whole life policies after the first few years, whole life works best with regular funding.

Because whole life is designed with the intention of being in-force at death (unlike term insurance), the costs of providing the insurance benefit – whether death occurs tomorrow or 50 years from now – must be secured by the insurance company. Thus, in the first years of a whole life insurance policy, most of the scheduled premiums do not accumulate as cash value. For some short-term thinkers, these “start-up costs” are an insurmountable psychological barrier.

The diagram to the right doesn’t represent a specific numerical comparison. Rather, it illustrates the conceptual difference between whole life insurance and other non-guaranteed accumulation strategies. Plan A is a slow starting, well-planned financial path; if you stay on the path, the desired long-term results will be attained.

In contrast, Plan B, while having the potential to deliver better results than Plan A, offers no guarantees; ups may be followed by downs.

As many Baby Boomers are finding out, what happens at the end of the plan is arguably more important than what happens in the beginning or the middle. But even though the long-term benefits of a whole life insurance program will accrue at an ever-increasing rate over time (Plan A), and even though various Plan Bs offers little assurance of finishing strong, some people simply can’t handle the longer start-up curve that comes with whole life insurance.

“Yeah but…” Is Anything Really Secure in This Economy?

In light of recent events, there’s general skepticism about any financial promises. Considering the wide-spread turmoil at once-solid financial institutions, who can say that a similar meltdown might not also occur with life insurance companies? It’s a fair question.

If we experience a complete economic and social collapse that plunges the world into a new “Dark

Ages”, life insurance companies will probably go down the tubes, along with everything else. But if your  sense of pessimism is that high, you better start watching your “Mad Max” and “Waterworld” DVDs for survival tips in a post-apocalyptic world, because there is no safe place for your money or your financial future.

Otherwise, there are good reasons to think life insurance companies will remain viable financial institutions, even in tough times.

In a January 11, 2009 Palm Beach Daily News article by R. Marshall Jones, JD, CLU, ChFC titled “Life Insurance: An Additional Asset Class in Difficult Times,” the author makes the following observations about whole life (or permanent) insurance companies in the wake of the past year’s economic turmoil:

Fortunately, the life insurance industry has almost none of the problems of Wall Street… Until recently, permanent life insurance was arguably the financial industry’s most complex instrument. Fortunately, due to its complexity, life insurance is highly regulated to assure there are always sufficient, safe assets to honor its guarantees. This is referred to as statutory accounting. For more than 100 years, every life insurance death benefit has been paid.

All life insurance companies use statutory accounting. In addition, publicly traded insurance companies use GAAP accounting. It allows them to report the expected profitability of products that require reserves to back their contractual liabilities.

Jones doesn’t say life insurance companies can’t fail. But life insurance companies have a proven track record of stability. And while whole life insurance may be considered a complex financial instrument, it isn’t an untested new idea (like credit-default-swaps or other next-generation financial derivatives that were “virtually unsupervised,” according to Jones). Whole life insurance has been around, been regulated, been through good times and bad – and succeeded.

                     “Yeah but…” It’s Too Complexand Too Boring for Media Sound Bites

Like Mr. Jones said in the previous paragraph, whole life insurance is a complex financial instrument. It takes time to explain it (even a slim “overview” article like this one takes over four pages!). And it takes even more time and personal attention to tailor a whole life program that fits an individual’s unique financial circumstances. There is no one-size-fits-all plan for whole life, and this is not a do-it-yourself project.

These characteristics are not ones that fit easily in column-length newspaper or magazine article, or a thirty-second analysis from a financial talking-head on a television program. And since whole life insurance is a long-term financial instrument, there’s not much demand for headline-grabbing topics like “Experts Pick Top 5 Life insurance Policies for 2009” or “Best Whole Life Plans to Implement Right Now!”

Instead, establishing a successful whole life insurance program requires several face-to-face consultations with a knowledgeable professional, and regular reviews. Yeah, it sounds more like going to the dentist than dinner and a movie. Whole life insurance may be serious, complex, boring – but it works.

Bottom Line: Everyone wants Whole Life Insurance

Consider these common “yeah buts…” concerning whole life insurance. Should any of them really stop someone from taking a closer look at how whole life insurance might fit in their financial situation?

No.

Does everyone need whole life insurance?

No.

Does everyone want whole life insurance?

The opinion here is yes.

Whole life insurance delivers a unique and flexible assortment of financial benefits. Properly situated in your financial program, having whole life insurance is better than not having it. And with the assistance of a skilled insurance professional, there are many ways to make whole life fit your plans.

Whole life insurance is a “financial classic.” Newer products and approaches may grab popular attention, but as a solid financial foundation for every stage of life, whole life continues to be in style.

It’s time to admit it…Everyone Wants Whole Life Insurance.

No one really argues the benefits of whole life insurance; the issue is the perceived cost of obtaining them.   Call me for more info on how you can obtain this plan 347-661-6234

Why Financial Planning is Important for every FDNY Member and their Family?

Personal financial planning is important to all FDNY members because it will provide you with a method of organizing your financial world for yourself and your family. While you are out protecting the lives/property of the people of NYC, it is a good idea to have a professional financial planner educate and assist you with your financial needs. A financial plan will help you though an unknown future and will empower you to have the independence to handle unpredictable events in your life. Personal financial planning is extremely important to anyone wishing to stay ahead of their finances.
A good comparison is how a GPS system works in a vehicle. When you first turn a GPS on, it tells you where you currently are. You then put in a destination of where you would like to go. The GPS will then tell you the most efficient way of getting to your desired destination. If there are any changes along the way, the GPS will make adjustments to still get you to your destination. If the GPS did not know where you where to start, how can you expect it to get you to your desired destination. A Financial Plan works the same way. You need to know (review) your finances today, then you can see where you would like to end up in the future. A financial planner can then help you follow the plan (map) to get you there. If things change along the way, your plan can be adjusted to still achieve your future goals.

A good financial plan will also help you and your family with: *Goal setting
*Financial education
*Avoid potential threats
*Future options
*accountability
*Budgeting
*Proper Protection
*Recognizing opportunities

The Simple City Worker Financial Plan

These 7 simple steps are the basis for creating a solid financial plan for you and your family. Many individuals and families are reluctant to start the process of reviewing their financial situation because they feel it is very time consuming and can become a very complex process. This is why I have created these 7 steps to start you on the right track and make the process simple and more enjoyable.

1. Protection First - Full Replacement / Lifetime Protection
 
  This refers to having all your Insurances (Health, Life, Property & Casualty, etc.)
  reviewed. Without the proper protections (foundation), everything else you build
  can be taken lost or  taken away.

2.Eliminate Bad Debts

   Remember keep it simple, get rid of CREDIT CARD Debt.

3.Create A Budgeted Lifestyle

  This means learn what $ is coming in, and what $ is going out each month.
  Truly live within your means. Be true to yourself and your family.

4.Increase Your Savings

  Pay yourself first, build a simple saving account/ money market account. This step may
  take some time, but it is well worth it. This will help you stay liquid, also having available
  funds on hand with no penalties and no fees. Very Important !!!


5.Reduce Tax Exposure

 This step involves reviewing your your overall finances with a financial planner and
  your CPA (accountant).

6. Minimize Risk

   This is where you should be gaining your education/ knowledge on how risk and
   reward can benefit you  or can hurt you. A basic understanding is needed for this
   step to evaluate your needs.

7. Overall Rate of Return

   Although this is a important step, it has been proven that if put number 1, you are
   chasing returns. Which means you are assuming a certain percentage to assure

   you and your family a safe and happy future. Again you will be LUCKY if this

   works for you. Saving on a consistent basis will give you and your family a safe
   and secure financial future.

   ALTHOUGH SIMPLE, THIS PLAN HAS
  BEEN STRUCTURED TO MAXIMIZE
  LASTING WEALTH WITH CERTAINTY
  NOT LUCK!!!

PLEASE CONTACT VINCENT (347-661-6234) TO SET UP A APPOINTMENT
TO DISCUSS HOW THIS PLAN CAN WORK FOR YOU AND YOUR FAMILY.




    

Why you need an Emergency Fund

In life you should expect the unexpected, and this is why you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.

Financial emergencies can come in the form of job or income loss, significant medical expenses, home or auto repairs or something you've never thought of. The last thing you want to do is be forced to rely on credit cards or a loan which could simple compound the problem.

So the big questions usually is: How big should my Emergency Fund be?

Most experts agree that you should have somewhere between 3 and 6 months worth of living expenses set aside in your emergency fund. The reason you want to have 3 to 6 months of expenses saved up is that the most common reason reason for the need of an emergency fund is due to a sudden loss of income. ( For city workers this comes in the form of 1) going without a new contract 2)loss of spouses income). When these events happen you still have bills to pay each month, so a few months of extra money can help until that income is replaced again. It is best to plan for a worst-case scenario so that the smaller emergencies such as replacing the hot water heater than just broke will seem easy to cover.

Start Small

If you don;t currently have an emergency fund or find it difficult to save money,the key is to start small. You have to realize that accumulating one month's worth of expenses will take some time, let alone 3 to 6 months.
If you set your immediate goals to be small and manageable you will have a better chance in reaching them.
The best way to start is to speak with a financial planner, and see what your monthly cash flow looks like. Once you know what is coming in ,and what is going out you can then figure out how much can be set aside on a regular basis to build your emergency fund.

If you feel it is to difficult to begin saving simple start with a small amount. Maybe you begin with $10 a week initially. While this amount won't add up all that quickly, the important thing to start putting something away and make it a habit. After a few weeks you won't even notice the $10 missing so you can start to bump it up to $15 or $20 a month and so on. You will begin to get used to that money not being there and can then slightly increase it again.

Another question: Where do I keep my emergency fund?

You can start with a saving  account or money market. It is important to keep it simple and make sure the account is liquid and accessible. If you want a little less access to it, open up a money market though a financial planner.

I hope this helped you understand how simple yet important this part is to creating the beginning of a solid financial plan.