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It’s all about priorities
There’s no time like the present to plan for the future by putting a financial plan in place.

Save for must-haves, and those nice-to-haves

It’s vital that you manage your finances now so your disposable income is put to good use.

Many millennials are paying off student loans, starting to save, and also taking care of other family members. At this stage of life, you’re buying appliances, getting a car, making travel plans, and having to start worrying about contingency funds for more practical things like fixing a burst boiler. But you also want to have fun, and perhaps start planning for that dream wedding or new home, or both.

To maximise any disposable income and begin building your future wealth, it’s important to start planning and managing your financial affairs now.

Separating needs from wants

To achieve your financial goals, you may need to balance long-term needs and short-term wants. Because there’s no formula for this, you will have to determine which trade-offs you’re willing to make. A key element of this is deciding what really adds value to your life. You may need that car, for example, but you don’t need to buy a brand new luxury vehicle right now.

Saving for what you need

There is no greater financial freedom than being free of debt. To get this debt to go away faster, consider making more than the minimum payment, making a lump-sum payment when you come into extra cash like a bonus, and using a raise or cutting your entertainment budget to increase your student loan payment.

Everyone needs to save for an emergency. Choose an amount of money and then set yourself the goal of saving that. Whether it’s a health issue, a car accident, an unexpected trip, or a family crisis, you need to create an emergency fund to ensure that you are prepared. 

Then there is the question of retirement savings. The sooner you begin, the more time your money has to grow, thanks to compound interest. Talk to a financial manager who can answer your questions, explain your choices, and allow you to make the right decisions about your retirement fund. 

Saving for what you want

Everyone has different goals, dreams and responsibilities, but there are several things that most people should be saving for because they improve quality of life. These include big ticket items like a dream holiday, a property or home of your own, a new car, luxury items that hold special appeal for you, or perhaps even creating a fund that will allow you to one day become your own boss.

Saving can be extremely difficult. It’s important to stay focused and to think of the future. It helps to make your money inaccessible by putting it in a fixed deposit, for example, or in a long-term investment vehicle, with an automatic debit order. 

Bear in mind that you will have to make sacrifices to reach your goal, but small things like avoiding the daily coffee shop run or making your own lunch instead of buying takeaways can add up over time.

Cultivating saving habits

As difficult as it may be to save, there are ways to cultivate the habit of saving money. Start by saving an amount of money every day. Repetition becomes habit and you will soon begin to associate the saving habit with positive associations, so that you continue to repeat it. This is important because it places the responsibility of saving firmly within you own hands. 

To maintain a habit, you need to experience visible and tangible rewards. Watching your savings accumulate – in an international savings account, for example – will help to support your habit.

A good approach is to spend less than you earn. Bringing your expenses in line with your income is critical to developing the habit of saving, and also to staying out of debt.


Next step

If you’d like to consider what savings options are available to you, take a look at the international savings accounts that we offer.