When will you save to achieve your goals?

The question is asked with “when” not with “if”. Why not with “if”? Because, sooner or later, you will have financial goals.

Current situation

At an unconscious level, the brain subliminally perceives the idea that it has all the necessary resources to solve the situation. It just takes time to solve.

“When will you save to achieve your financial goals?” is the right question, not if: “Do you want to save for your financial goals?” The first question is also a logical one, at the same time. Can you achieve your goals other than by saving? No! Not financially healthy.

Ok. Let’s say that your financial situation does not allow you to save very much. It does not take much. You just need to do it. And as quickly as possible to achieve your financial goals. If you do not have money to save now, you never will. “I will save when my salary increases” is, in fact, never. Your salary will increase, that is not the problem. The problem is that with the increase in salary, your expenses also increase. Let me show you.

When you were a student and an employee, you had a small salary. Your expenses were within your budget, enough to have fun, eat, support your studies and your home. Right? You did a little of everything, according to your possibilities. Then, you became a full-time employee. Your salary increased as a result, but so did your expenses. Accommodation became more expensive, being a rent in a private apartment. Food, which until now consisted of a package from your mother, became the 15 lei menu from the store near the office and, thus, your expenses increased, becoming equal to the new salary. If your salary increases, you will get a car, a house, children will appear, so new expenses.

Wealth and its secrets

The rich are those who save the most money from their earnings, not those who have the highest income. You can earn 2,000 euros, even 20,000 euros, but if you spend 2,000 euros in the first case and 20,000 euros in the second case, you still call yourself poor. Even more so when you earn 2,000 euros and have debts of 20,000 euros. You can only be called rich if you earn 20,000 euros and spend 2,000 euros. The 18,000 euros available, invested efficiently, will lead you to financial independence very easily. Easy! Yes! It can be easy, but the important thing is to make the decision to save and invest for what is really important to you.

“When is the time to start saving?” Now! Now is the best time. Not tomorrow, not next month, not next year. As time passes, the intention diminishes, extra expenses appear and “I have nowhere to save!”

If you have very high expenses, 1% is enough to start with. Yes, 1%! Does it seem like a little? It’s no problem! This is how you learn to put money aside. You can start like children with change, or with the change from shopping. Over time, it adds up. No, you won’t get rich by saving the rest, but you will create the habit of saving some money. The first step should be small, giving you confidence and hope that you too will be able to save quickly and easily like other people do.

The Savings Recipe

The generally valid recommendation of financial planners and consultants is to save 10% of your income every month. In particular, however, the 10% may represent a much larger amount for your financial situation and then you need to start with as little as possible. The important thing is to start establishing this habit in your life.

Financially prosperous people have saved between 40 and 50% of their income and that is why they are among the rich. As I said earlier: “It doesn’t matter how much money you earn, it matters how much you save.”

But before you get there, you need to start. If you have big financial goals, then the motivation to save 40% of your income every month will come from planning those goals. You will start with 1% to quickly save more. The recipe for the beginning is to have an amount that you can afford to put aside and that does not destabilize you financially.

If you do not have large debts and, as such, large fixed expenses, the percentage can be 5% to start with. The amount allocated monthly must be motivating enough. The amount you accumulate after a year should represent at least a monthly salary. If it is less, it is not motivating enough. Not in the first year of saving. We are talking from the second year and in the long term. (A good financial planner and consultant will determine the appropriate amount for your current and future financial situation, in relation to your goals.)

Saving and financial goals

Depending on your goals, saving and investing money helps you achieve them. You may want a 30,000 euro studio apartment. You can take out a loan, but by saving and investing you will end up closing that loan, either by partially repaying the loan, or by creating a savings plan, in parallel, and an investment plan, so that, from the capitalization, you can fully repay the amount owed to the bank and recover part of the loan interest.

If you have chosen to save and invest, without borrowing, you will benefit from financial freedom. This way you will live your life the way you want. Whether you want a house with a playground for your children, or an early retirement from work and a high standard of living in retirement, saving is still the way to achieve your goals. Saving is the first step, then the money you save generates high returns for you, by investing it. The percentage you allocate to saving will later be allocated to investments. Only by saving, the house will remain a goal written on paper. Most of the time, saving is the reason that disciplines us; a solution through which we can develop financially and access other much more profitable options.

Let’s not forget that time is also very important, not just money. The moment when you decide to save for your goals is very important. It must be as early as possible. Ideally at the first salary. The latest is the moment when you want to have achieved the goal the following year. It is impossible if you don’t have the money. And where will you get the money from if you don’t save first?! We are not talking here about inheritances received or winning a contest.

What can happen if you don’t have the money necessary for the goal and it is not achieved next year? Well, you postpone achieving the goal. Once postponed, you need to know that you will unconsciously give birth to a feeling of helplessness, a feeling of frustration. This feeling can be annihilated through awareness and avoided by starting to save as early as possible, while also setting realistic deadlines and amounts.

Therefore, we need to be realistic, set financial goals, and for each goal we set, allocate an amount to save first, then invest. This way we end up having the financial life we want.

Success in becoming aware of (the power of saving and investing) money!