Preparation for the Future

"Are you lost if you don't know your final destination?"

Consider this question and how it applies to saving money.

Some people are dedicated and consistent with saving while others struggle to do so. Opening a savings account at a young age is the first step towards building an effective savings habit. Consider gift checks you receive on holidays, birthdays, and special occasions. Yes, you will want to spend some of that money on fun things and should certainly do so. The key word there is “some”; enjoy some of it and save some of it. One way to approach this is to set a standard of savings for these gifts. Perhaps you choose to always save at least 50% and enjoy the rest. Maybe you know there are expenses coming up soon that you want to be prepared for, and so you choose to save 75% of gift money and enjoy 25%. Having a target of what to save vs. spend will allow you to be consistent and hold yourself accountable to your financial future.

Once you have a savings account in place, develop a comprehensive monthly budget that includes all your known expenses, no matter how small. This budget can then be used to help you decide how much unexpected income to save. For example if you know your job income covers all your monthly expenses, you may want to save more of the gift money to really kick start the savings account!

While initially you may not know the destination of how you’ll need your savings, when the need arises you’ll realize your path of savings did not lead you astray. The sooner you begin following a budget and being diligent about saving some money, the more financially savvy and secure you will be.

Starting to budget and plan today will allow you to acquire those things with greater ease and stability!

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