The Principle of Savings
6:02:00 PM
One of the common advice on financial management is Pay
Yourself First. You deserve it because after all, it is you who worked for your
salary or income. People usually interpreted this by splurging once per pay day
like shopping, dining out or traveling. While these things are not bad, there
is one good way of paying yourself first. That is to Save. Through savings, you're giving yourself a favor of accumulating wealth that will work for you in
the future.
How to Save. The key here is to set
aside a certain amount, ideally 20% of your Income as your monthly savings. You
can contact your bank and request them to take away automatically a fix amount
from your payroll account and transfer it to another savings account, so that
you will not be tempted to use up that portion of your money. Consistently do
it and in no time, you will see you are building up your wealth.
Now
your savings is consist of Emergency Fund, Insurance, Retirement and Health
card. Not because you have a savings account with a few bucks you
consider yourself having Savings. You have to have all this stuffs.
1.
Emergency
Fund – this must be a savings account consist of at least 3-6 months of
salary. This way, in cases that you will lose your job, you won’t beg and you
still have funds to keep you going.
2.
Insurance
– This pertains to amount you or your family will receive in case of accidents,
incapacity or death. You can check out
Sunlife or Manulife to checkout products that fits you. You will pay a monthly
premium for a certain years and it will cover you lifetime.
3.
Retirement
– after you saved 3-6 months of salary, then the succeeding savings will now go
to your Retirement Fund. This fund should be untouchable and should be
exclusively use in time you decided to stop working and start retiring.
4.
Health Card
– Definitely you don’t want your savings to be used up on your health issues so
it is good to have a health card. Most employers provide this to their
employees anyway. If your employer doesn’t, then invest one for yourself.
That’s about it.
I know it’s a lot of money but you don’t have to build this one time, you will
build this one by one so the earlier you save, the better. There you go, Pay
yourself first the better way.
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