The Importance of Saving
For anyone starting their journey towards financial freedom, the first step is actually very simple – save.
Committing yourself to save part of your income has numerous benefits – aside from just the money you saved.
It forces you to be conscious of what you are spending your money on. It also forces you to stick to a budget. Both of which are necessary traits for any aspiring investor or business owner.
And most importantly, it provides a real-world test. If you find that you are unable to save, then it’s pretty much a sure thing that you are not ready to invest yet. Because without financial discipline, it’s more likely that you’ll lose more money than you make investing.
But that doesn’t mean that investing is only for those with large or excess income. You see, the test isn’t how much you save, but how regularly you can save. Even if you earn just the minimum wage, if you can save any portion of that regularly, then you’ve passed.
But if you do find yourself unable to save, don’t worry. There are numerous things you can do to remedy that. You can track your monthly expenses and try to identify and cut out unnecessary or frivolous expenses. Or you can identify cheaper alternatives that nonetheless meet your needs.
And once you make the necessary changes, all you have to do is stick to it. It’s ok if you fail every now and then. What’s important is that you always remember and try to stick to your budget. Soon, you’ll find that you are able to stay within your budget with no problem.
But if you still find yourself having problems saving, a more effective way might be to pay yourself first. Just be sure to start with a small amount first, and work your way up to around 10% of your income (or more, if you can).
And once you’re able to save consistently, you’re well on your way to a brighter future.
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photo credit: Alan Cleaver via photopin cc