Excerpt from: Don’t Wait Until It’s Too Late
It is never too early to start planning and preparing for your financial future. The best time to start preparing for your financial future is right now. Most people wait until later in life to start taking the subject of finance serious. Sometimes it works out for people, and sometimes it doesn’t work out for people. However, most people who wait until later in life, to get their finances in order, often experience feelings of regret. It may not seem to be the most important subject in your life right now to educate yourself on, but if you look around you, having money and not having money affects people’s lives around the globe in a multitude of ways — every single day. Educating yourself on finance is a way to invest in your well-being, future, and present. The earlier you start learning about finance, the more control you will have over your present and future financial situation.
A good rule of thumb is to save at least 10% of your income. Saving a percentage of your income is a way to invest in yourself. When you save money, you are conveying to yourself that you value your well-being and financial future. Saving money is a healthy financial habit that prepares you for unexpected circumstances. You also will experience peace of mind and feelings of security when you start saving money.
After you get into the habit of saving money (which only takes a few weeks), it is time to make your money work for you by investing it. There are many books that offer advice on investing. If you do not know anything about investing money, then I suggest reading articles or books on the topic at a beginner level. I also suggest visiting with a financial advisor (which is free at many firms or banks) to learn about some different investment options that would fit your income and your goals. Always do your own homework though and make sure you choose options that work best for you. I like to think of investing as a tool to earn more money without having to do any work; you save a percentage of your income, and put it in an investment account (such as a mutual fund), and let compound interest work to your advantage.
Giving a percentage of your money, time, and resources helps you avoid living a selfish life; it also keeps you grounded and grateful for all you have. Many people feel they must give to churches and charities, but this is not the case. You don’t have to give to specific types of organizations such as charities and churches; you can give your money to people, causes, academic institutions, positive programs, events, etc. Never place a limit on where and how you can give of your time, money, and resources. Giving can be as simple as treating someone out to lunch, getting groceries for a family on welfare or temporarily tight on resources, or buying someone you know, who is stressed out, a care basket or a massage. Furthermore, you do not have to give monetary resources, you can also give physical resources (e.g. clothes, shoes, furniture, books, etc.). The goal of giving is simply to help others and show kindness. When you give, it not only increases your self-esteem and makes you feel good about yourself, but can also create and initiate a domino effect. Giving to others can really soften the toughest hearts of people and make them more receptive and willing to do the same for others; this essentially means that when you give to others you are not only giving directly to them, but you are also giving to all the people who will be positively affected by the first person you gave to.
Life is meant to be enjoyed, and it should be enjoyed. Spending money is a good thing, especially when you have money and resources to expend. When it comes to spending, the best piece of advice I can give you is to spend less than you bring in. If you follow this rule it will take you far. Also, another good tip for spending is to think for 24–48 hours before making purchases (especially bigger ones); this has helped me determine if I truly want or need something. Sometimes I completely forget about an item when I take the time to consider the purchase before immediately buying it. There should be a balance between buying things you need and buying things you desire. You don’t want to over-indulge, but you also don’t want to under-indulge. Depending on your income, you can set a certain percentage of your income that you intend to spend (e.g. 10%); your goals and expenses will ultimately determine what percentage you decide on. Spending should not involve feelings of guilt, it should be a fun activity. If you are experiencing feelings of guilt, take some time to reflect to determine what changes and adjustments need to be made to your budget or yourself to eradicate these feelings.
What age would you like to retire? Determine what age this is and then decide how much money you want to have saved up and invested when you retire. Finally, use an investment calculator (type in “retirement calculator” or “investment calculator” in a google search box) to see how much money you will need to save each month, or per year, based on your current age. If you are young, this may seem like a silly thing to do, but I guarantee you will not feel that way when you are retired at the age you anticipated with the amount of money you wanted to have saved up. Be different from what the average person does, and start working on your financial future today. You may want to retire at 30 years old or 40 years old or maybe even at the age of 70; it doesn’t matter what age you want to retire at, it matters what you do now to make sure you retire when you want to retire.
You don’t have to be a millionaire or be rich to live a financially sound and pleasurable life. Of course, you can have this financial status if you would like, but the main point I want to convey to you is that having money and doing the things you desire can be made possible through simple planning and discipline. Start today!
Don’t Wait Until It’s Too Late 2nd Edition