By Daniel C. Felsted
If money could talk it would say, “There is a way out of your financial mess. It’s called saving.”
The first financial lesson one should have learned in school was, “Save a portion of everything you earn.” This one lesson would save countless souls a lifetime of pain and misery.
But since we weren’t taught this lesson previously, today would be the best time to learn it.
To Begin, there are a few things you should do to get started.
One, get a second job, a side-gig so you can practice saving money from your new income source rather than the harder step of saving from your main paycheck.
Two, start tracking your expenses so that you know where your money is really going. Most of us can easily spend a hundred dollars or two on frivolous items without even noticing. So you have to know where every dollar goes.
Three, you’ll have to start saving some of your regular jobs income. When I first started saving, I had 1% automatically withdrawn into a retirement account, because, back then, I couldn’t have resisted digging into it if I had access to it.
I was that pitiful with my money.
Soon you will be able to see that you’ve saved a little something. But be careful, it is retirement money, nothing else money.
The fourth thing is to resist the major urge to spend this saved money on something, anything because you’ve never had that much extra money just laying around. I know. It’s a huge temptation to spend it. But don’t. Not now.
Go back and review step three. After you’ve adjusted to saving 1% of your income increase it, little by little, until over time, you’re saving 15% of your income for retirement. You’ll soon see that you really can save something. And, if you get a company march you’ll be blown away at how quickly it adds up.
Fifth, now you need to save 3-6 months worth of your income into an emergency fund savings account. This is for an emergency. Nothing else! I mean it.
Having an emergency fund is a game changer. No longer will you have the constant stress of not being able to pay for a car repair or a plumbing problem. That stress is eliminated when you have an emergency fund.
Sixth, start another savings account called an “opportunity fund.” Fund it with $3-6,000. Use it for those unusual opportunities that come along every so often that you have always had to pass up. No more.
NOTE: Read more on an opportunity fund here.
Seventh, start another fund called your “Capital fund.” This fund is where you really begin to build wealth. This is your investing fund. Your “boost your retirement savings” plan.
NOTE: Read more about a capital fund here.
Eighth, along the way read a financial book, take a financial class, attend a financial seminar. In short, give yourself a financial education. This is one of the secrets of wealth building. Ever increase your financial knowledge.
Ninth, teach others what you are learning and share your successes and your failures. “When one teaches two learn.”
So that ten, you can change your life and the lives of your children, your neighbors, your friends and your extended families.
Here’s to the new you. Cheers.
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