Getting Your Financial Flowers to Bloom

Brian Watson, CFP

Beautiful gardens do not happen overnight. You must plan ahead and slowly nurture the growth over time to produce the desired results. Accumulating wealth is the same. You must methodically save money every single month. Although the growth will seem very slow in the beginning, over time you will start to see the benefits as your balance will grow faster and faster.  Most people struggle with actually being able to save every month. The problem is, they never started a plan to save before they spend each month. But how can you budget an amount to save each month?

The best way is to pay yourself first. Most people will end up spending an amount of money if it is left without a specific purpose. To avoid this problem, the first thing you should do is make sure an amount of money comes out of your paycheck and goes directly into a retirement plan or other savings account. That way it will be gone before the opportunity is there to spend it. 

If you are due for a salary raise, defer a portion of that raise before you get used to making that additional amount. For example, if you get a $5,000 raise, that equates to about $400 additional per month. If you start using this extra $400 per month for other purposes besides saving for your future, it will be very hard to divert that extra income at some point in the future. You should take half of the $400 per month and save that right away. That way, you will enjoy the extra $200 per month of additional income, but also be on track to save $200 additional every month.

Prosperity Partners, Inc.
www.prosperitypartners.com
800-868-6230
JasonR@ppicash.com