You probably hear people telling you to start investing today. Am I right? But if you aren’t financially stable yet, how would you even start? Or where do you even begin?
Having goals compels you to save with a purpose. Remember the time you wanted to buy something so badly and you patiently saved up for weeks to get it?
For short term goals:
For long term goals:
Keep your eye on the prize
When you’re young, it’s hard to set your eyes on a retirement goal that’s 30, 40, 50 years away, but an investor’s best asset is time.
If you understand why saving and investing for the future is important, it’ll be easier for you to get started.
Starting early provides your investments extended years of compounding. It’s a similar concept to putting your savings in a bank, however with investments, your returns tend to be higher over a longer period of time.
The “I’ll start tomorrow” mentality only delays you from achieving your goal.
Before you start any investing, you should have some reserved cash to spare. This helps you relieve yourself from immediate financial pressure.
1. Make a list of all your fixed expenses (i.e. things you can’t escape from like, phone bills, insurance payments, transport)
2. Understand what makes up the bulk of your spending on entertainment, convenience (like taking a taxi), and shopping.
3. Now, try taking on some simple budget games with a friend, family member or a partner:
4. Set aside $1,000-2,000 as an emergency fund.
5. Pay all your debts, writing them all down in a budget app. If they are fixed payments over a period, note it down too.
6. Lastly, grow your emergency fund to give you 3-6 months salary for a buffer.
This way, you free yourself from any financial stress or burden that could weigh you down while you start your investment journey.
After you’ve got yourself covered against your liabilities, time to start growing your money. This helps you to put more money into your pocket each month instead of taking it out.
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