Save a little, Live a lot.
Let’s start at the top, with the bottom line.
While we are working, and earning an income, we need to save for the future.
There our 2 elements of the future that we need to consider:
Our own retirement We must put money away during our working lives, because when we are older and no longer earning, we need to live off the savings and the interest that those savings have earned. Simple.
The lives of our dependents We must also put money away to provide for our families if something happens to us and we can no longer earn enough to provide for their needs, either through illness, or death.
Exactly how much we need to save, or how much cover we need, varies from person to person. It depends on our particular circumstances, for example:
- How much do I earn?
- What do my expenses amount to?
- What does food cost every month?
- What about phone and electricity?
- How much do I spend every month?
- How much do I put aside as savings?
- Do I have any debt that needs to be paid?
- A home loan?
- Car payments?
- How many dependents do I support?
- Do I look after my children only, or my parents too? Anyone else?
- How much do their needs come to?
- How much do I need every month to provide for them?
- And what about my plans for the future.
- What about university fees for my children which I am currently not paying as they are young?
- What bills will I have to cover in the future?
Simply has a calculator which can be used as a great tool in determining our current and future financial needs. In doing a simple audit of our current income and expenses, we can understand more easily what amount we have available to put away for the future. Although the advice from the wise suggest that we save first, and spend after - so that we always put a portion of our income away.
It can be uncomfortable to think about planning for illness, old age, and death, but it is so important to do so while we are younger and able to work. Even small amounts of savings, or cover are better than none at all!
Even if we start later in life than ideal, it is still a good idea to save and to consider what the future may hold, and to plan for that.
Even if we don’t quite reach our saving goals, it is a great idea to aim for them and keep then in mind and aim high.
Let’s face the future, save a little, live a lot, and keep a firm focus on a simple financial plan - for ourselves and for those who count on us.