Saving is very important in personal finance? Why? It is crucial to building long term wealth, achieving goals of travel, buying a house, or paying for your child’s education. It can be comforting to have some stashed away for a rainy day. But with so many differing opinions out on saving. How much should you save? And where do you put your money?
I have been in the same position as you are in. And I know how daunting it can be. So, I have compiled 3 questions you can ask yourself which have always helped me determine this for my savings goals:
When can you afford to start saving?
Knowing when you can start is vital to having more control. You can look at when you are able to afford to save and start then.
When will you need the money to be available?
If you have a set date for when you need the funds, it makes it easier to plan. For example, for a holiday or for doing your postgrad you will know how long you have to save up for. This helps you determine where you put your money to earn the best return.
How much money do you need to have saved up?
Work out how much money you need by evaluating why you need the money. If it for an emergency fund, what are your monthly expenses. If you are going away, what will it cost. This will help you to save appropriately. This is an important personal finance tips.