Tip #4: Savings

Well ok, I know I've been talking about savings in my recent posts, and here I am again. This time it's specifically about savings. When I refer to savings, I think of it as something that's mine and mine alone - it is the money that I don't use for my everyday expenses, for paying bills, or for buying "doodads." I call it mine alone because it doesn't go anywhere it stays with me. You may think "so what's the use of that money if your not going to use it?" It's like this: sometime in the future I will not have a job anymore, I may be too old to work, or I may have a family to support. As I've mentioned previously, how you manage your finances now determines the kind of future you can create. Having a good savings plan frees you (a little bit) from the worry about the future. Whatever financial future comes for me, I will be prepared to face it.

Now picture this: You're working in a large company earning a descent income. Your job is ok; schedule is normal, an 8-5 shift – 5 work days a week and 2 days off. Company is huge, job is stable (or so you think), promotion opportunities are vast. You've been working here for a few years, been promoted twice. But suddenly on the newspaper headlines you read an unexpected economic crash. You life suddenly starts to take a turn as you find yourself packing your stuff, taking a long last look at your cubicle or what used to be your cubicle. You've been laid-off. If you didn't have any savings, you'd probably be in panic, "What am I going to do next?", "Where am I going to get my income?", "Where can I find another job?" However, if you had savings while you still had the salary, you could sit down and calmly (at least) think of your options of what you going to do next, in the meantime while you're thinking, your savings will support you (at least while it lasts).

So since the future could be very unpredictable, start saving, start budgeting, start to discipline yourself. Be ready to face the future whatever it may hold.