This article is intended goal is to give its readers specific personal financial advising tips about savings, one part of a Financial Budget that is very important.
A large number of people dream about the possibility of winning the lottery but as we all know this is very unlikely. Despite this I am here to explain another way to reach your personal finance goals and end up with quite a large sum of money. The way I am about to explain the Personal Finances does take time and discipline but it is also guaranteed, unlike the lottery. It consists of a steady and consistent plan of saving and investing.
In a personal finance budget one of the most important parts is the savings part. Being able to be disciplined and save some of your income is probably the most crucial step in achieving personal financial freedom. If someone is not able to save some of the money that they earn there is no way that they can ever even begin to think about achieving personal financial freedom.
To be successful in achieving personal financial freedom and creating wealth people must begin to save money today and keeping saving it over a long consistent period of time. If we save our money and invest it properly the money itself will begin to create more money with little to no work on each persons end and the result will be them achieving the goal of personal financial freedom.
Savings is very important first and foremost because it can help people to stay out of debt. Having an emergency savings account fund allows people to have a cushion of money for unexpected expenses so that they do not have to go into debt when something unexpected occurs. Having an emergency savings account to draw from is very important because it allows you to stay on track with your personal finance budget that you have set. In general a personal financial advisor suggests that each person have an equivalent of about 3-6 months of expenses set aside in an emergency savings account.
After setting up and establishing an emergency savings account the next step is to begin to save for the future. If you want to experience financial freedom you have to have a significant reserve of money that will last you a long time. You have to have enough money that money is not something that has to be thought or worried about anymore. In order to have this large reserve of money you must save small amounts of money over a long period of time. Saving small amounts over time coupled with good investment decisions will help lead you on the path toward your goal of personal financial freedom.
Here is an example of how saving small amounts can add up over time:
If someone has a take home income of $3000 per month they should try to save at least 5%-10% of their income each month. This is equal to $150 to $300 per month. If someone was able to save $150 per month and merely make the average stock market return of 10% per year they would have about $30,000 after 10 years and over $200,000 after 25 years.
Now if this same person decided to save $300 per month instead then after 10 years the they would have about $61,000 and after 25 years they would have over $400,000.
The most important part of saving is to set a plan for the amount that you plan to save each month and then stick to the plan. It is best to treat savings like a bill so that you do not skimp off of it each month. You should take money from your paycheck and put it into savings immediately when we get paid. Without setting specific goals people tend to take away from their planned savings and it hinders their plans for achieving personal financial freedom.
The only specific tip I can give you is to stick to your personal finance budget and put your planned amount toward savings first and do it consistently.
This whole concept is about self-discipline now so that you can experience personal financial freedom in the future and of course this all comes back to creating a personal finance budget and sticking with it. This is the most important aspect of personal financial freedom and will help you too succeed.
Please check out the Savings Calculator at my blog so that you can see what saving small amounts of money can do for you.
Without building up a lump sum of money you will never succeed in achieving your goal of personal financial freedom. Please take this personal financial advice seriously and do yourself a favor and begin your quest for personal financial freedom.