by Judy M McCutcheon
What does the word “SEXY” conjure up in your mind? For men, maybe it’s a lady with some fantastic measurement stats, or for the ladies, it might be that man with those awesome muscles and ripped abdominal muscles.
I bet you never thought to associate sexy with financial matters, let alone savings. After all, if you have the money to pay for everything you need right now, why all this hassle about savings. Why should you be saving, and what’s the importance of it anyway? It’s imperative that you have savings goals and reasons behind those goals, so you don’t feel pressured into saving and fall off the wagon.
Achieving the elusive “financial freedom” is doable, but of course, there are rules, and you must check the boxes, and nobody likes checking the boxes, because they are boring and unsexy. But for the sake of your older years, there is but one fact that you cannot change – “It does not matter how much money you have if you have no money management skills you will lose it.” The first step, therefore, is to change the way you think about your money and the only way to start doing that is to improve your understanding of money and how to manage it. Understanding basic money principles is key to changing your financial habits and put you on the road to financial sexiness.
Let’s look at some strategies to help you get started:
- Start with saving 10% of your salary off the top: – It is a good starting point, and it is advisable to deduct it from the source, so you don’t see it. Another thing you might want to consider is this – every time you get a pay raise, increase your savings with a portion of that raise. Over time you would notice that you are up to about 14% or 15% without much effort. This is in addition to your company’s pension fund if they have one.
- Go beyond retirement: – It is critical that you save more than the money you are putting in your retirement savings account. If you do not have a retirement account, now is a good time to start one. Starting early is critical to you being able to retire and stay retired, but keep in mind that your savings alone won’t do it, add some form of sensible investment to your portfolio. It is important that you make saving a priority for both retirement and other goals.
- Ensure that your savings puts a dent in your lifestyle: – A good way to measure if you are saving enough is to check to see if you are saving until it hurts. If it feels a little tight around the waist, then you are doing great. Make sure your budget is flexible enough and have some breathing room, but tight enough that you must watch your spending each month.
- Gradually build up the amount you save: – You want to work on increasing the amount you save each month. While it is advisable to start with 10%, if you can afford to start with 20% don’t limit yourself. If you work for significantly more than you need to live on each month, then you should be saving much more. Remember every time you get a raise, pay yourself first; give yourself the challenge to set your spending categories as low as you possibly
- Give your savings a reason for being: – You should have a purpose for your savings – emergency fund, retirement fund, carnival fund, fun fund, back to school fund…these are all reasons that should motivate you to start, continue and increase your savings. Imagine saving for carnival or back to school a year in advance – then you won’t need to take a payday loan at those ridiculously high-interest The earlier you can build good financial habits, the better off you will be. Saving money consistently is an important financial habit to develop.
- Do some good: – Remember, that it is in giving we receive. There is no greater joy than the joy you receive from being able to help others. It is not only about money, but if you are able to give some time to help others to grow and develop, then do so.
In the end folks, it’s all about you. Developing good financial habits is an important element in being able to live your desired lifestyle. It does not matter which point you are at, just start from there and you will be well on your way to being financially independent – which comes with a sexiness that is second to none.
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Judy McCutcheon is a partner in the firm Go Blue Inc, a Human Development Company. www.goblueinc.net