FINANCIAL PLANNING: SAVING as a tool in taking control of your finances as a woman

Hello,

Let me start with a few wise words which my lecturer in the university taught. It may have its base in education but I consider it wise. Here goes:

Do not buy what you can rent, do not rent what you can borrow, do not borrow what you can beg for.

It basically means take the least expensive option always.

Common also, people mistake savings and investment to be interchangeable. They are not synonyms, investment is money set aside for creation of wealth and savings is well, just savings (kept aside for emergencies and future occurrences).

We are still on taking control of your finances as a ‘female’. Yes, Males also. You cannot truly take control of your finances if you have not mastered the act of saving (saving for future needs and wealth creation).

How best is saving done?

•         Immediately you receive money
•        Using a fixed percentage
•         Transferred to a non-expenses saving account
•         Salary increment included

The above is also true for investment saving, it is also best done immediately you receive money using a fixed percentage, transferred to a non-expense saving account or the specific investment and salary increments should be used to fund your savings and investment account and not a higher or better lifestyle yet.

What percentage should I use as my savings and investment?

It largely depends on a real and honest assessment of your income and expenditure from your budgeting. (Budgeting was explained here). The most common rates tend to be around 10-40% of all income and from this savings, a sharing ratio of 60:40 for Savings: Investment.

Saving tips

• Have a budget. (find out what it is here)
• Cut down on expenditure. (Next post will tell how to do this)
• Regardless of income, maintain the current of living until you have created ‘sufficient’ wealth to warrant a change.
•  Save before spending. A wise man once said, do not save what is left after spending but spend what is left after saving.
• Differentiate between your saving for future needs and saving for investment/wealth creation.
• Write out a ‘what I can use my savings for’ and ‘what I cannot use my savings for’ list.

I guess you have enough for practice; next post is on cutting cost. Women would love this. Would you not rather have friends and family see this? Share across your social media platforms and as usual, please leave me your comments below.

PEARL