Key to building wealth: Save not Stunt

By Shavon T. Magee, MBA

In today’s society young professionals have a tendency to spend money frivolously, in order to show others that they have made it. I strongly caution against such actions. Instead of stunting, it is wiser to save your money.  Saving is the main key to helping one build wealth. Saving takes some sacrifice, but it is worth it in the long run. Below are some ways to help you save your money with ease.

Set Goals…

What are you saving for? Always have goals. A person should have both long term and short term financial goals. Goals should always be measurable and as specific as possible. We all hear people say I want to retire early. That’s fine, but what is early? The standard retirement age is 65; therefore early can be 40 or 64. Retirement is a long term goal. Long term goals will take more than one year to accomplish. Short term goals will take less than one year to accomplish. An example of a short term financial goal is to save enough money to buy a car.

Start saving ASAP…

Time plays an important factor when it comes to saving money, especially for retirement. The more time you have your money saved, the more time your money has to grow. Therefore if you haven’t begun to start saving money I advise you to start now. Most retirement accounts can be opened with as little as $50. You can find online banks that would let you open a savings account with only $1.

Need Help?

Find a financial advisor. When looking for a financial advisor, make sure they are certified. Make sure you find out the fees that might come with having a financial advisor.  I have a financial advisor and she is wonderful. Maybe you don’t feel that you are at the point where you need a certified financial advisor; see if the finance department at an university can advise you in how to save/invest your funds. There are also a wide range of books that will guide you through saving and or investing your money.

Budget

Live below your means. Not within, but below. Start by keeping all your receipts. This way you have an accurate picture of where your money goes. Analyze your receipts and find out what you spend too much money on. See if it is possible to cut down on unnecessary expenses. You want to live below your means because you want a cushion to have in case something unexpected happens. Personally, I give myself a certain amount to work with. I sit down at the beginning of the month and I take out all necessary expenses. I believe in the 10, 10, 80 rule. I tithe 10 percent of my before tax income to the Lord, then I save 10 percent, and I am left to live off of the 80 percent. For example, if I make $1000 this pay period, I would tithe $100, $100 will go to my savings account, and I will pay bills, shop, etc., with the remaining $800. With the cushion you have left over it is a good idea to open an emergency account.

Putting your money aside for the future can be hard in the beginning, but saving is rewarding. Remember, start today for a better tomorrow.

Contact Shavon at SMagee@b-now.com