Wednesday, 31 December 2014
Thursday, 18 December 2014
Money: Save Now or Save Later?
Building your savings is a very important milestone and decision that one makes and takes, because if done correctly, this savings that you built, will grow and serve you in the future.
Building your wealth at a very young age is something that may be taught by your parents, but it may also be self-taught. Like many other things in life, we choose our own path.
At a very young age, I recognized the importance of creating my own liquid assets but when I was younger, my spending power was stronger than my saving power. Once I secured a full-time job after completing school, I created a 5 year plan for myself in terms of material, physical and financial.
The first on the Financial List was to be prudent. With a small starting pay, I started consistently saving about $100 with the Bank. There is a story here about a financial instrument that they provided me with, to help with the savings, but that's a story for another time.
The second on the Financial List was to also be prudent. Apart from the $100 that I set aside to be kept with the bank's financial instrument, I also made it a point to have my own liquid cash to save. This meant being frugal on so many different levels but it helped and served me over the course of my life.
Once the two items were constantly moving, after a while, I noticed a problem. My salary and my savings shared the same account type. This made it very tempting to spend the money that I have already saved. To address the problem, I opened another bank account, with another bank, so that there will be a differentiation between a spending and a savings account.
Having two accounts still didn't solve the problem though. This is because, both banks' ATMs are within reach, which made withdrawing cash really easy. Back to square one, having two accounts and cash draining fast, I went to open yet another bank account with Bank no.3. This particular bank had no accessible ATMs, which automatically made withdrawing them harder.
With the success story of Bank no.3, I looked for even more opportunities to grow my money. I went into purchasing Gold Investments, and I took out some other savings and placed them into ILPs, I also took up an Endowment Plan, which will give me some returns in due time.
Almost 10 years since I first started working full-time, have I achieved what I wrote in my Financial List? Not all, but I'm getting there. It's very important to create an achievable milestone which will help keep you on track and serve as a reminder to you about what you want.
I am forever thankful to my parents who taught me how to save at an early age, and I'm glad that I am able to use this useful "skill" to help me with my Financial Journey.
The key is to save more than you spend, and not to touch the saved money unnecessarily. You will not lose anything by building your savings early. There are in-fact, a lot of benefits when you start early.
The picture above sums it all up. I hope for the society to change their thinking and will be able to grow in terms of building Financial Knowledge. Ultimately, there is a difference between spending money first or saving money first.
Building your wealth at a very young age is something that may be taught by your parents, but it may also be self-taught. Like many other things in life, we choose our own path.
At a very young age, I recognized the importance of creating my own liquid assets but when I was younger, my spending power was stronger than my saving power. Once I secured a full-time job after completing school, I created a 5 year plan for myself in terms of material, physical and financial.
The first on the Financial List was to be prudent. With a small starting pay, I started consistently saving about $100 with the Bank. There is a story here about a financial instrument that they provided me with, to help with the savings, but that's a story for another time.
The second on the Financial List was to also be prudent. Apart from the $100 that I set aside to be kept with the bank's financial instrument, I also made it a point to have my own liquid cash to save. This meant being frugal on so many different levels but it helped and served me over the course of my life.
Once the two items were constantly moving, after a while, I noticed a problem. My salary and my savings shared the same account type. This made it very tempting to spend the money that I have already saved. To address the problem, I opened another bank account, with another bank, so that there will be a differentiation between a spending and a savings account.
Having two accounts still didn't solve the problem though. This is because, both banks' ATMs are within reach, which made withdrawing cash really easy. Back to square one, having two accounts and cash draining fast, I went to open yet another bank account with Bank no.3. This particular bank had no accessible ATMs, which automatically made withdrawing them harder.
With the success story of Bank no.3, I looked for even more opportunities to grow my money. I went into purchasing Gold Investments, and I took out some other savings and placed them into ILPs, I also took up an Endowment Plan, which will give me some returns in due time.
Almost 10 years since I first started working full-time, have I achieved what I wrote in my Financial List? Not all, but I'm getting there. It's very important to create an achievable milestone which will help keep you on track and serve as a reminder to you about what you want.
I am forever thankful to my parents who taught me how to save at an early age, and I'm glad that I am able to use this useful "skill" to help me with my Financial Journey.
The key is to save more than you spend, and not to touch the saved money unnecessarily. You will not lose anything by building your savings early. There are in-fact, a lot of benefits when you start early.
The picture above sums it all up. I hope for the society to change their thinking and will be able to grow in terms of building Financial Knowledge. Ultimately, there is a difference between spending money first or saving money first.
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