I’ve talked before about the importance of having some sort of liquid savings, what is usually referred to as an emergency fund. It’s a topic that’s brought up quite frequently on financial blogs and everyone seems to have their own opinion. I’m not going to go into a lengthy explanation of what the right amount for one is and how it should be handled, but I am going to discuss what I personally do.

I’m aiming for one year’s worth of living expenses saved up in liquid savings. To repeat, that’s one entire year’s worth. I’ve heard it time and time again that it’s too much and better returns could be had elsewhere. Regardless, one year’s worth is what I’m going for, and you’ll see shortly how it’s not really that tough of a goal.

So how do I plan to accumulate that much? Some may be thinking that it’s a great goal to have but maybe a little unrealistic or something that will take years to achieve. This isn’t the case, and I’ll explain why. Every time I get paid I put 20% into this emergency savings account. If this was all I did, it’d take 4 years to reach my goal of one year’s worth (80% left over, which is four times twenty). This isn’t the whole story though. I also pay 10% of any earnings to our church as tithing and put another 40% into another account reserved for future investments. What this means is that only 30% of my take home pay is left over for living expenses, bills, and other spending.

So with this scenario, how long will it take to accumulate one year’s worth of savings? About a year and a half. Living expenses account for 30% of earnings, and 20% is saved. So you can see that it’s not a distant far off dream to have an entire year’s worth of savings. It does presuppose living well within one’s means, but the less you live on, the less you’ll have to save to cover it. So there you have it. One year’s worth of savings done in 18 months.

Fiscal Musings has secured a spot on Alltop Personal Finance which is basically an aggregator of all the top personal finance articles, hence the name. It’s a project started by Guy Kawasaki, who’s site you should check out if you don’t already know who he is.

Many other well-known personal finance blogs are also a part of Alltop already and I’m sure there will be even more eventually. The site is at least worth checking out to see if it’s a resource you’d enjoy.

Many people would like to own their own business and work for themselves, but they don’t necessarily want to have to start from the ground up. In fact, this is what keeps many people from running their own small business. The initial start-up costs and uncertainty can be too much for most people. But there is another avenue to explore if you’re seriously interested in owning your own business.

Instead of starting a business from scratch, you can instead choose to buy a franchise that already has a system and business model in place. You can find more franchise information at RedHotFranchises.com which offers a wide variety of franchise opportunities for anyone looking to pursue this path. You can browse their site by industry or by the level of investment you’d be comfortable with. You can find information about the start-up costs, franchise fees, and royalties and earnings claims. So if you’ve ever been interested in learning more about these opportunities, here’s a great way to do it.

Getting ahead financially in the most basic sense is actually fairly simple. It typically seems complicated to many people because of the many varying opinions about the specifics of something that in general terms is quite easy to understand. For example, choosing the best account for an emergency fund and exactly how much to keep in it is something about which many people have differing opinions. But it’s only one part of the basics of personal finance.

What I’m talking about here are the two main parts of everyone’s finances, our earnings and our expenses. It’s important to focus on both of these instead of neglecting one in the name of the other. As The Digerati Life mentions, we should spend less than we earn, and earn more than we spend. These two phrases may seem redundant, but the subtle difference is important.

Focus on Your Earnings

I believe it’s safe to say that you don’t have a financial life without earning any money (or at least having some sort of income). Too many people though, go through life having resigned themselves to earning whatever income it is that comes fairly readily to them. If you’re serious about attaining some level of financial freedom, there needs to be a focus on growing your earnings. You can’t save what you don’t have, and you can’t invest what you haven’t earned. Be sure to make this a priority in your financial life.

Focus on Your Expenses

As you’ve probably experienced yourself, or at least seen with others, it doesn’t do any good to earn a great deal of money if you end up spending it all. And for those that have already taken a keen interest in their finances, this is usually the area of most focus. I’m not going to go into a long explanation of why one needs to focus on expenses (it just makes sense), but I do want to make one point. You can always spend more than you earn. So make sure to keep tabs on your spending.

If you take a step back and look at your financial life, you can probably see which if these two goals you tend to favor. That’s what it should be though, a tendency. You need to consciously focus on both of these areas, regardless of where you naturally focus.

Hopefully by now everyone has gotten their taxes finished and the return sent off to the IRS. If not, you’d better be looking in to filing an extension or getting down to business today. You can still get it done by e-filing, or if you prefer to mail it in the traditional way, make sure it’s postmarked by tomorrow. It doesn’t have to arrive by the 15th, you just have to prove that you sent it off by then.

Once you’re done with everything, it’s probably a relief, but don’t make the mistake of thinking that you’re all done until next near about this time. With everything still fresh in your mind, it’s probably a good time to start planning for next year. Tax time is so much easier when you’ve thought and planned ahead and have all your records in order. You can also minimize the taxes you owe by taking the time to figure out how to handle all your financial affairs in the most tax efficient way.

So if you’re still working on last year, you’d better stop reading this and get to work. And if you’re already finished, start looking forward to next year and proactively planning.

I’m off to Louisville, Kentucky this weekend to visit some family and just get away. I’m not so excited about gas prices spiking to $3.40 the day before we’re now leaving, but it’s just something that has to be dealt with.

Other than visiting family this weekend, the Kentucky Derby is going on so there should be some interesting festivities and such going on. I’m hoping that I’ll have some access to the internet while I’m out there, but I’m not entirely sure about it. So I’ll try to update when I can.

Last night as I was working on a few things (including this blog) I had the show American Idol on in the background. I don’t really get that wrapped up in the show, but I don’t mind having the music on in the background. Last night, however, wasn’t the usual weekly show, but it was instead the yearly Idol Gives Back show complete with all of the stars and musical performances.

Having it on in the background got me to thinking again about the importance of generosity and the impact for good it can have on others’ as well as our own lives. I understand that it can seem counter-intuitive for a financial blogger to espouse the giving away of money, but I guarantee you that it’s one of the most fulfilling things that you can ever hope to do with it. There are few things you could spend your money on that will make you feel better about yourself.

I’m not trying to convince anyone to give specifically to the Idol Gives Back promotion, it’s just what got me to thinking about the subject. There are so many various ways that you can give of your money, time, or other means for the benefit of others. All you have to do is find a cause that you’re passionate about, and you’ll know where to go from there.

When it comes to the subject of giving and generosity in general, I always think of one my favorite phrases, something we’d all do well to keep in mind: Remember, Living is Giving.