We’ve all been there, we’ve all said “this year will be different” and we’ve all let procrastination and our lives get in the way. We understand, it’s human nature.
<Imagine this scenario:
That feeling, you know it right? You start to feel chipper, feel a sense of accomplishment and pride. Productivity makes you feel good, also human nature. You had a roadmap as to what you needed to do and in what order.
While that feeling of accomplishment on simple tasks is amazing, we assure you it’s even better when you take control of your finances.
In the words of Warren Buffet: “ Don’t save what’s left after spending, but spend what’s left after saving.”
A simple trick is to impose a “savings tax” on yourself. Everyone pays taxes as part of their monthly income. Now it’s your turn to be the tax man and enforce your own “savings tax” on yourself. We typically suggest that ~20% of your income should be your personal savings tax which goes into a regular savings plan, investment platform account, or other savings vehicle.
Utilize automatic contributions to give yourself the discipline to prioritize your savings and yourself first.
Watch your savings steadily grow.
You can adopt one of two ways to save more money:
Earning more isn’t easy in these uncertain times. Great for those who are but for those who haven’t, that leads to spending less. Regardless of the times, most people can easily name areas they could eliminate or scale back. By doing an audit of your expenses, ask yourself “what’s unnecessary?”
You cannot build wealth with bad spending habits.
Trim the fat.
Your retirement is ultimately YOUR responsibility. In South East Asia, without any government or employer provided pension, you’re on your own to save for your future.
The ball is in your court, start scoring.
Like tip #3, in Asia we don’t have any safety net for medical expenses. You cannot rely on any Medicaid, Medicare, NHS or other state provided system to take care of you.
Even here, unforeseen medical bills can quickly run into the thousands. All it takes is diagnosis or even fairly routine surgery. Factor in more serious or multiple surgeries, chronic conditions and ongoing treatments can further escalate that to $35,000, $50,000 and beyond.
At worst, we recommend getting an inpatient only plan with a deductible. Even if you loathe health insurance, at least get protection for the big-ticket items and make sure you have access to the best healthcare in Asia.
Protect yourself and your savings with health insurance.
What is your motivation for increasing your savings? Set “why” goals, and give yourself tangible and achievable savings goals. What are you saving for?
Just like with your to-do list or errand list, start with goals that are achievable first, then increase your goals as you grow your savings. Imagine that moment, that day, that feeling of pride and achievement. Got it? Good, now write down your whys.
Without why goals, there’s no what or how.
By trying to time the market, you have to be right twice:
Relieve the stress of investing by doing a regular savings plan with recurring monthly contributions no matter what the markets are doing. Over the long term, take advantage of dollar cost averaging. As prices go down, you actually get more units for the same price.
Sit back and relax, you have a plan, stick to it.
The main driving factor in the accumulation of wealth is time. The longer your money is working for you, the more you will accumulate due to compound interest.
Any delay in starting your savings journey means one of three things:
Time is the healer of all wounds, the age-r of fine scotch whisky and wine and it’s what you need to give yourself to accumulate savings.
Earn while you sleep.
Just like your weekend errand list, you take things one step at a time. Difficult questions need to be asked and answered. Here are some:
There are things you can’t control in life, but need to be prepared. Having a plan to build your savings and putting away a small amount of each paycheck is something you can do.
Control what you can control.
Remember, with anything in life, you have to start somewhere. And we’re here to help.