2021 Financial Goal
We are in the New Year 2021 and it’s time to get things organized for the year ahead. One of the most vital aspects of setting your financial goals is the Pay yourself first system.
I know you’ve heard that a lot but it is the best thing to do in order to get yourself started.
You sure need to have your investments and savings in order for a comfortable present and future.
Often we believe that we are not making enough money and tend to postpone saving to a time when we will be earning sufficiently. However, this concept needs a correction-the habit of saving must start the moment you start earning!
Guideline to get started with pay yourself first system.
When you think about saving a certain amount monthly, it does not have to be a large sum of money.
You can start with an amount as low as $20. The idea is to build your corpus with regular sums of money. These savings can later be invested in profitable schemes.
The question that most people ask about savings is, “How much should I save?”
The amount to be saved depends on the age of the individual and the stage in his career.
It is safe to save approximately 10% of income for someone who has just started saving money.
Let me break it up further for you.
So if you make a hundred thousand dollars a year, 10% is $10,000 that you will be saving.
If you’re getting paid once a month, it’s $800 a month that you’re saving.
If you’re getting paid twice a month, that’s $400 that you’re saving.
If you’re getting paid weekly, you’re probably close to around $80 to $100 dollars that you want to put away.
Paying yourself first means that the money you set aside goes to a savings account or an investment account.
15% is a good way to get started for those in their early 30s.
Those who have not started saving until the age of 35 should think of allocating 20% of their income for savings.
Essentially, the older you get, the higher percentage you need to save!
So, people who are in their 50s and have not started savings might have to look at 40-50% of their income!
As is apparent, the numbers go up with age! So, it is recommended that one starts saving from an early age.
The corpus you build with regular savings is what will make you future ready! Saving and investing regularly helps plan early retirement.
Developing a habit of saving from an early stage in life is beneficial in more ways than one. It makes your life easy and offers more choices. Besides, it reduces stress and makes you feel secure.
The amount you set aside for saving should be the first thing you do with your income. This should go into your savings before you spend on even your house rent! When you pay yourself upfront, you are essentially building your savings, your retirement fund, or your investments.
So, make sure that when you are setting your financial goals, you pay yourself First before you pay anyone else!
If you need any help in planning your finances, connect with me, Veronica Karas!