All in Budgeting
One of the things I’m still battling with on my financial journey is building an emergency savings fund with 6 months’ salary in it.
My focus thet last few years was to pay off debt and start building an investment portfolio, which I’ve done really well.
But the emergency fund?
Not going so well at all.
I don’t consider my investments in endowments and unit trusts, emergency funds. To me they're long term investments, for other things.
I'm currently in the process of planning my 2015 , which has required me to ask myself some important personal finance questions:
The first question helps us understand the impact of our current financial behavior on our future.
This question helps us get clear on the life that we want to create. Write this vision down and start taking action to make it a reality.
I recently saw a video on Facebook of a lady who claimed she was saving money by reusing water that she cooked spaghetti in, making everyone take 1 minute showers, switching off the TV during commercials when watching a show in order to save electricity etc.
This behaviour has deeper emotional seeds than just wanting to be frugal, and would argue that it’s self-deprivation and miserly.
i. Save and invest 10% of your gross salary for retirement
Pay 10% of your gross income towards your retirement plan. It’s tax deductible, which decreases the amount of tax you pay on your salary.
ii. Create a budget
List all your income and expenses and subtract your income from your expenses. Save 10% of your net income in a savings account for emergencies. Open up a savings account and make sure you save 10% of your net income every month. This is your emergency fund.
Note: when you create your budget you should align your expenditure with your vision for your future. Eg: if your goal is to move up the career ladder, then part of your budget should be allocated to studies.
Wouldn’t it be nice if you could save a few hundred dollars every year?
Imagine all that you can do with that money: go on vacation, join the gym, finally get that phone you’ve had your eye on.
So where will these extra dollars come from: Your insurance payments.
Today I came up 5 simple steps to help you to save on your insurance policies and distinguish good quality insurers from bad ones.
