You spend as frugally as you can, and your savings are increasing every month. But to make sure your financial habits ensure your security in the present, and for years to come, start by asking yourself these two questions:
- What Are You Saving For?: Think about where you need improvement in your financial life. If an emergency were to strike, could you cover the costs? In addition, think about major financial accomplishments you want to reach in your future. Do you want to someday own a home? Travel abroad for a year? Once you have a big picture idea of what you want to accomplish, you can start adjusting your budget to maximize your saving and get an accurate sense of how long you will need to reach your goals.
- How Much Is Enough for an Emergency?: Start by determining your monthly income. This is a good amount to have in your fund, in case you suddenly no longer have a paycheck. Or even better: Save up to cover six months’ unemployment. Determine your goal amount, then look at your budget. Ideally, you have left yourself at least twenty percent of each paycheck for saving, but whatever you can afford to contribute to savings each month for this goal, do so. If you calculate and realize you won’t have enough saved in a timeframe that works for you, considering taking on a second career. This will help you accelerate your savings.
Unfortunately, the question of whether or not we are saving “enough” has no easy answer. Every person has different needs. The way you approach long-term savings goals is no different than how you approach saving for an emergency fund; the major difference is the length of time it will take to save! To learn more about how to improve your financial life, including embarking on an exciting second career, visit Syncis at https://www.syncis.com/blog/