If you’re a professional working in a corporate, the chances are that you earn a good salary. But how much are you saving? A little while ago, we talked about the importance of saving even if (and possibly because) you earn well, and gave you three clever tips for saving more of your monthly salary – reduce your debt, do it yourself if you can, and look after that RA.
We understand just how important it is to start savings as soon as possible.
Here are three more things you can do to ensure you’re able to save the recommended 15% of your salary:
1. Set a budget
No matter how much you earn, if you don’t understand where your money goes and why, you’ll never be in charge of it and you’ll never save enough of it. Take the time to plot out a (realistic) monthly budget and see exactly what your expenses are. This will give you a clear picture of your finances and help you to make decisions about the purchases you make. When it comes to ‘forced’ savings, build a set amount into your budget and make sure you save before you do anything else with your money. Trying to save at the end of the month almost always leads to a shortfall.
2. Build an emergency fund
We’ve said it before and we’ll say it again. Life is unpredictable and unexpected accidents, illnesses, and events like retrenchment can cost you much more than you ever dreamed. Don’t get caught short – put in place an emergency fund of at least 3 – 6 months’ salary (only to be accessed in emergencies) and make sure you’re always covered for the unexpected.
3. Pay off your student loan
Whether you were government funded or received a private loan, once the studying is done, look to repaying your debt as quickly as possible. Simply put, debt creates more debt, especially when interest rates come into play. So, don’t allow a long-standing debt to wipe out the benefits of your hard-earned education – pay it off as soon as possible and, once that’s done, reserve that money for better things in the future.
As independent financial advisers, the team at TRG specialises in wealth management and believes in creating sustainable lifestyles for all our clients, whether just starting out or well-established.