Knowing how to manage money helps you make smart choices and allows your money to work harder for you. You will be more likely to avoid traps that can undermine your ability to achieve your financial goals. You will be in a better position to pay off debt and build savings.
The key to future financial security is budgeting and establishing a regular savings plan. By working to a budget and savings plan, you are able to monitor and make changes in areas that may need to be altered. Starting to save and seeing your savings build up also creates a feeling of success and satisfaction knowing that you are getting closer to your financial goals.
A simple way to start saving is to develop your savings plan...
Where am I now?
Before you start saving, you need to establish your current financial position - what you earn (income); how much you spend (cost of living and debts). The amount left over is the amount available for saving.
Where do I want to be?
When identifying your goals, remember your short, medium and long term goals. If you haven't saved before, start off slowly by setting yourself a short term goal that requires only a small amount of saving, such as saving for your first car or holiday. Set yourself a time frame and set aside a specific amount from each pay to reach your goal within a set period.
Most of us know the importance of saving. However, it never seems the right time to start. The earlier you start, the sooner you get to achieve your goals.
When is the right time to start saving?
The bonus of starting early is the benefit of compound interest. Compounding is when you reinvest the dividend or distribution you earn on an investment. Over the years, if you don't withdraw it, the investment will start to generate more capital for you.
Getting into the habit of saving ensures your financial security now and in the future.
Tips on Saving and Budgeting
- Don't make your budget so tight that it is impossible to maintain.
- Set realistic goals and a flexible budget.
- If you fail to stick to the budget in one month, try to make up for it the next month, i.e. by going without a night out at a restaurant or movie.
- Regularly review and modify your budget - look for areas that you can improve on.
- Establish a regular investment plan.
At Apex Partners we welcome the opportunity to talk to you about ways we can assist you and your finanical situation. Call us on 1300 856 338 to arrange a free, no obligation appointment.