Quite often we hear the rejection, such as: “Oh, very expensive costs at the prospective school choice kid. It seems we can not afford it. You know? Dad did not have that much money. Pick a cheaper school”.
Been able to guess your mood of the child, who was disappointed not to get what he wanted. Not infrequently did the father regrets. “If only I’d saved long ago, my son would not be disappointed like this”.
Was there still a solution to not upset the child? There. Borrow money. Which means the debt. I think the reader agrees, that this simply move the problem, aka pseudo-solutions. Finish the problem to avoid disappointment child, moved into the issue of debt being chased, which often leads to big problems in our domestic life. A disaster is not it?
How this ‘small’ so-called savings can make a difference in our lives. Unfortunately, our awareness of saving money in the community today is still minimal. Various reasons emerged when we actually have the ability to save, such as: “There are still many purposes, will hopefully have some left, will be saved”.
Delays such as this often leads to: never got around to saving. Time passed, without knowing it at the time we come to stay ‘sorry’. Is something like this would you let it happens in your life?
Quoting the wise words of Mother Teresa: ‘Yesterday is gone. Tomorrow has not yet come. We have only today. Let us begin ‘. Let’s start saving now.
How to ensure that we are saving activity will provide optimal results? At the moment we receive a regular income every month, of course, will flow into monthly expenditures to meet the household needs (let’s call it shopping), to pay obligations such as credit card bills, mortgage, car payments etc., and allocate funds for savings. Which was to be paid? .
Let’s review some of the patterns of flow of funds following routine:
Revenue -> Shopping -> Deferred -> Savings
In this first pattern, spending first, then just pay the obligation and the rest to save. Most of us use these patterns in everyday life. Excess in this pattern are all your shopping needs and liabilities (or partial) are met. But usually the expenditure needs vary, ranging from primary needs until the desired goods bought but not required.
Chances are you spend all the funds that are so high that not all liabilities remaining unpaid and no longer to save. Unless you are a very frugal in spending.
For the longer term, this pattern will be very difficult in getting a positive cash flow, it will even be a burden the next month (which actually does not need to happen), remember there are arrears in installments which would be affected by compound interest.
Revenue -> Deferred -> Shopping -> Savings
In this second pattern, because the obligations are paid first, then you will be spared from the burden of unnecessary costs in the form of compound interest expense due to delay in payment of such obligations in the next month. Still, chances are you will spend the remaining funds for the expenditure is still very high. So there is no rest for the save.
Revenue -> Save -> Deferred -> Shopping
In my opinion, this third pattern is the best. That is, you oblige yourself to cut your income for savings first. There’s a good idea to change the “Mind set” of these savings with the concept of “Paying yourself first” as the main principle in the book “The Richest Man in Babylon” by George S. Clason. In this book provided that you should appreciate your efforts so far to pay yourself at least (minimum) 10% of your income in the form of compulsory savings you before paying your obligations and spending.
This will provide flexibility to increase your assets through savings funds collected. Fund savings will be “Income Generating Asset” or assets that have the ability to develop himself which will give you a “passive income”. Of the amount of passive income is dependent on financial instruments that you choose to put your savings fund.
After that first pay all your obligations. And then you are free to shop without worries.
With the third pattern will provide increased certainty of your assets, in accordance with the financial goals you have planned. Moreover, the sentence of rejection (because guns have the money) in the first paragraph of this article would never have happened.
Surely you agree that saving is obligatory. Let’s do it right, with prioritized as a key point in our lives. With the added discipline and persistence in saving will certainly provide more certainty for achieving your financial goals in the future.