Saving money is a fundamental money skill that must mastered if one desires to become wealthy. The earn and then consume pattern must be broken in order to achieve long term financial success. Whether you find saving money easy or challenging. This report includes 5 tips that will revolutionize your thinking as you begin your savings journey.
Saving will not make you wealthy
This tip seems to run counterintuitive to the purpose of this piece. Saving money in the traditional places such as banks and credit union place you at a deficit. After factoring in inflation and taxes you are actually going backwards. Most traditional accounts are paying less than 1% in interest which means your money is compounding very slowly. Look up the rule of 72 and you will receive a greater understanding of the point I am making. Wealth is built by becoming an investor and a business builder.
Save Some When You Earn Some
Saving a portion of your income whenever and however you get paid is an important discipline to develop. The amount being saved is secondary to the habit being formed. Paying yourself first is a timeless financial success principle. Set a goal as to how much money you will save anytime money hits your hand.
Save Automatically
Automating your savings makes life so much easier. Automation takes thinking out of the equation and allows accumulation to happen much faster. Systemize your savings by tapping into programs your employer, bank, and other financial institutions may offer.
Have Different Tiers of Savings
Look to develop different tiers of savings. Here are 4 categories of savings to include in your financial game plan. Save and account for the below:
- Emergencies or unexpected events (if you have no savings see how fast you can accumulate 1K dollars and go for 3-6 months after that.)
- Vacations and trips (vacation clubs are great for this category)
- Short-term big-ticket items such as houses and cars that you plan to purchase in 3-5 years.
- Cash needed around the house in case you cannot access your financial institution.
Save For Opportunities
This tip is my big thought or idea for this document. You want to save money for opportunities that will come your way. People with the ability to take advantage of opportunities when they arise are folks who have cash or credit on hand. Cash is king when the house, business, stock or other asset becomes available.
For additional wealth building resources like this one. Please go to: https://www.dexterbjenkins.com/.
©Dexter B. Jenkins
Author:
Dexter B. Jenkins is a licensed realtor and seasoned investor who has been buying and selling properties since 2017. He writes and speaks extensively on the subjects of financial literacy and using real estate as a wealth generation tool.
