We all love to nurture our hobbies and passions. But financial constraints can sometimes deter us from pursuing them later on. For example, you may be someone with an interest in photography. And you may have your eyes set on a camera that is too exorbitantly priced. Purchasing the accessory from your salary would mean a big dent in your monthly expenditure. But if you already have some money saved for this, you can go all out and have it added to your photography paraphernalia without a trace of guilt.
Having a home of your choice is like a dream come true. So if you are planning to go for it in the future, set a budget first. Then calculate your down payment. Gradually, start saving for your down payment which is 20% of the purchase price of your home. The more you save the better it is. Because this way your loan amount will also come down significantly and your other expenses of moving into a new house will also be taken care of.
Emergencies come unannounced. So having money saved for contingency situations like hospital admissions, medical treatments, car repairs, etc can spare you the mental trauma that comes with the huge expenditures incurred from these unwarranted situations. According to experts, you can deposit three to six months of your salary into an emergency fund. These savings accounts should be high-yielding ones that allow you to withdraw money several times a month without charging any penalty.
How to achieve your financial goals?
Follow a budget - To avoid overspending, create a budget and follow it religiously. This will help keep a check on your income and expenditure and put a curb on overindulgence.
Reduce your debt - If you have huge student loans to pay off, set up a fund toward that. You must also try to repay any credit card debt that you may have. There are many repayment plans available that might help in reducing your monthly expenditures on loan repayment.
Need an extra hand? Accredited Debt Relief can help. Get a free consultation today, no obligation!
Depending on your salary, you can start by saving a little in the beginning. As your income goes up, you may increase your contributions. An easy way to hack this is to become comfortable with budgeting percentages rather than dollar amounts. For example, if you’re auto-saving 20% per month towards a home, an increased income requires no additional effort, if anything you can now increase the percentage to increase the savings even further. Without adjusting your percentages, using this method will ensure that you’re staying away from lifestyle inflation by simultaneously increasing your contributions to all financial goals as your income increases. So if you can refrain from running amok with money early on, life will make sure you get a good return on this crucial investment.