excellent financial advice

I don't always follow this financial advice, though I'm getting closer. The advice I most need to take to heart:

1) Pay yourself first. What does that mean? It means you divert money into savings automatically, before the money hits your bank account. You divert an automatic percentage of your salary into your 401(k), and you set up your direct deposit so that money is automatically put into a special savings account unconnected to your ordinary checking and savings, that serves as your rainy day fund. The rainy day fund should hold at least six months, and preferably a year's, worth of expenses. Retirement savings should 15-20% of your income.

Yes, I said 20%.

"20%!!!!!" I hear you screech. "I can't afford it!" Well, then you'd better start developing a taste for cat food. Home equity is going to be a bad way to save for retirement in a country with a stagnating population, as the US will have when I get around to retiring. And Social Security benefits may be slashed, means tested, or otherwise legislated out of your pockets. If you're putting 3% of your salary into your 401(k) every year and hoping that will cover you you're in big trouble.

The reason you pay yourself first is that for most people, budgeting just doesn't work. Most people simply don't have the discipline. The answer is to keep the money out of your bank account. If you don't see it, you won't spend it.

and

6) Saving is more important than lattes People who say they can't afford to save can surprisingly often afford Starbucks, new cars, and alchohol. These are not things you need in the same way that you need to be able to eat if you get sick and can't work.

The easiest things to cut out are food. You *can* cook at home, no matter how tired you are; breaded chicken breasts and steamed vegetables take ten to fifteen minutes to prepare from scratch. Cutting out restaurant meals and buying your own lunch are the single easiest way to save money. Oh, I know, it's not as pleasurable to pull a turkey sandwich out of a plastic bag as it is to go down to the deli and get exactly what you want this minute. But the markup on those sandwiches is generally between 400-800%, and a daily starbucks will cost you over $1000 a year. As a side bonus, the more you have to cook it yourself, the less you'll be tempted to overindulge in goodies. And if you want to hang out with friends, I can generally prepare a very nice dinner for four for less than it would cost me to pay for my own meal at a New York City restaurant. And no waiter badgering you to free up the table.