Saving money is like building a muscle. I know you are thinking, where is this going? Any trainer can tell you that building muscle does not happen overnight; making anything is not instantaneous. It takes research, planning, proper form, and diligence.
It is the same way with building a savings account. What is your plan? Have you begun budgeting? Are you patient with yourself? Creating a savings account is not an easy task at first. We all know that it’s essential to save money, but it can be hard to spend less than you earn without specific goals to work toward. Your situation should warrant you to set some goals. In my research, there were common reasons to save that were apparent, saving for an emergency fund, retirement, a big purchase, and paying off personal debts.
Setting aside money for an emergency gives you peace of mind and helps to prevent financial setbacks. Experts encourage having three months of basic living expenses in an emergency fund, but remember, every situation is different. You must be willing to save according to what seems to stretch you beyond your limits. Saving can at times feel like a sacrifice because it is. Living in a society that thrives on instant gratification can rob you of the joy that comes after persevering. That leads to the next phase of saving.
Additionally, we should aspire to save for retirement. In my studies, most financial experts suggest saving minimally 10% of your take-home pay monthly in a 401(k) or/both an IRA. In a world where one might be living paycheck to paycheck, saving for retirement can be the farthest from your thoughts. However, it is essential to shift our thoughts from only seeing trees to viewing the forest; life is a journey. What will tomorrow look like, and what are you doing today to prepare for longevity?
In conjunction, there is another form of saving where you may be saving for a more significant purchase such as a house, car, or starting a business. Saving is indeed a build-up, and the sooner you begin to put money aside for the purchase, the less you have to contribute all at once.
All in all, saving must become a natural occurrence in your life. As it builds, you begin to enjoy watching it grow. You respect yourself more. You don’t mind the sacrifice because it reassures you of peace of mind. So, I will ask you again, what is the plan? How are you building that saving muscle? I will leave you with these reminders as the winter semester closes and you go for summer break; first, calculate your total income, then, set a plan for your money to grow by budgeting, and finally, SAVE SAVE SAVE!
Please have a great summer; we will be back in the fall, and as always, let’s Build!