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It's better to be prepared than to be worried
I have read many statistics indicating that, on average, 7 out of 10 Hispanic families in the United States feel they earn too little to be able to save. Today we are going to talk about how, despite earning little, we can develop the healthy habit of saving.
What is Saving?
Saving is that small portion of our income that we do not allocate for spending; on the contrary, we set it aside to be able to fulfill plans, goals, and dreams in the future. When we save, we are paving the way to achieve what we desire most without the need to fall into debt.
Saving is synonymous with being prepared. When the unexpected happens, it’s our savings in the emergency fund that serves as a cushion to soften those blows. I always say: give your savings a purpose, a focus—define a destination for that money; this will create a sense of motivation in us to keep doing it month after month. Remember: “saving is a path toward making your dreams come true.”
Benefits of Saving
When you develop the habit of saving, you are consequently putting your finances in better order, since it also leads to the good habit of creating a budget to maintain control and prioritize your spending. In other words, you allocate your money toward activities and responsibilities that truly need to be fulfilled.
No matter how much you earn, you can always set aside a portion of your income for saving. The question we often ask ourselves is: how much? It’s important to set aside at least 10% of your income to pay yourself first; in this way, you’ll be saving each month. In fact, it is always recommended that the first thing you set aside in your budget is your savings, and then you distribute what’s left to cover your lifestyle expenses.
Why Should We Save?
Emergency Fund
The first goal we all should have is called an EMERGENCY FUND. This savings fund should be between 3 to 6 times your monthly income and can only be used in case of an unforeseen event.
Retirement
Another important goal that we should start working on today is our RETIREMENT. It will be the longest vacation of your life, and you will approximately need 20 times your current annual income to be able to support this life project. Retirement is not just a trip or a destination; it is both. That’s why saving and preparing step by step each month to reach this goal is vital.
Another Goals
Save for your annual vacations, for buying your house, to start or inject funds into your business, save for that new car you’ve been wanting, or to pay for your children’s college education. If you think about it, for most goals in our lives, we need money—so let’s start preparing TODAY
Where Should We Save?
This is the million-dollar question: where do we save? This depends on the short-, medium-, or long-term goals we have. There are many financial vehicles designed for specific goals that can offer us multiple advantages. What’s important at this stage is to recognize that the friends of our money are: time, tax advantages, a good interest rate, and above all, the discipline to stay committed to following your plan.
You can find savings accounts and financial vehicles at banking institutions, and you can also consult with financial advisors or educators. Through an analysis, they can provide recommendations tailored to you and your family.
You may have heard someone say: no one has ever gotten rich by saving money. Today, we are talking about developing the healthy habit of saving so we can live more peacefully. Saving will give you the peace of mind that when emergencies arise, you can face them calmly and even make better decisions.
Make saving a lifestyle. Remember: It’s far better to be prepared than to live in worry.
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