As financial experts who have helped countless clients to make wise choices regarding their retirement income planning, we have a thing or two to say about saving money. There are all kinds of habits you can form that will help you to save, providing for a bright future where your stresses will be much lower than they are now.
At Kennedy Wealth Management, we believe that it’s important to master the fundamental “big” things when it comes to saving money. The small things count — looking for coupons, managing your subscriptions, skipping impulse buys, and so on, but ultimately they’re not very effective if you haven’t adopted some of the most fundamental and essential money-saving habits.
While we focus on helping people with retirement income, it’s never a bad thing to save money, even if you don’t have a specific purpose in mind. Here are some tips on how to grow your money:
Automate Your Finances
It’s hard to consciously and deliberately divide your money up when you get it. The second it’s in your hand or loaded into your bank account, all of those expenses you’ve been putting off suddenly manifest themselves. It’s all too easy to convince yourself that you need the entirety of your paycheck, resulting in nary a dime being put into your savings account.
Talk to your bank and see how you can automate your finances. This means setting up accounts where money will automatically deposit when your paychecks come in. You won’t have to worry about saving it — it will already be done for you. This is a great way to save money and avoid the trial of self-discipline that is hard for many people to bypass.
Have One “Untouchable” Account
The Richest Man in Babylon is a famous classic book that teaches about wealth management, and its principles still hold up well today. The author posits that we need to “pay ourselves” every time get money. The idea is that we don’t truly own our money, because it’s spent on bills, expenses, and luxuries almost as quickly as it came. By putting a portion of your money into an untouchable account every week or month, you’re “paying yourself” by giving yourself money that’s going to stick around.
The trick with this account is to not touch it, ever, unless the money you’re withdrawing can be used to obtain more money, whether it’s through safe investments or capital for a new, reliable idea that will generate a return. Over years, this account will grow substantially, snowballing into an enormous source of wealth.
Keep a Budget
When it comes to it, money management is very simple — if your input exceeds your output, your wealth will grow. The only thing you need to do to ensure this is keep a budget. By recording your purchases and planning out your spending capacity, you can always ensure that you have a surplus. Creating a budget is an easy process that can be the difference between poverty and wealth, and everyone can do it.
Finally, it never hurts to talk to your local financial advisors. At Kennedy Wealth Management, we specialize in retirement income planning and we can help you to form a plan that ensures a bright future. If you’re in the Northridge or Calabasas area, we would be more than happy to help. Contact us today to get started.