The time you would be energetic and could work hard is limited. No matter how energetic you are today, once you cross the 50 years bar, your strength would begin to wane. At this stage, you fall back on whatever you have been to save while you were still agile. If you do not have anything to fall back to, then, it poses a major challenge. You have to depend on others for survival in your old age.
To avoid this precarious situation, you have to cultivate some financial habits now that you are still active to secure your future. If you want your future to be secured, you have to religiously imbibe these financial habits:
Financial success most times is not accidental. You have to work at it. It is not forgetting the fact that some people have wealth bequeathed to them. But many have to deliberately strive to secure their future, knowing that they have limited active years to work. To have a guaranteed future, you need to consciously plan, shape out what you want to look like before you get to that future.
A good way to start planning is to break your big goals into smaller, digestible pieces. This can help you stay on track and work towards your larger long-term goals. For instance, if you have 30 years to work before retiring and you plan to save N10 million before retirement, instead of focusing on saving N10 million by the year 2047, try establishing several short-term goals, such as reaching N3 million in retirement assets by the year 2020. Once you reach that goal, you can reassess where you stand and create a new savings goal for 2025, and so on.
The same principle applies to just about any short or long-term goal, from saving for school to building a house. To know what strategy to employ such as deciding between saving first owing to a house and investing, you would need to know what you ultimately want to achieve. This is why setting goals is so important.
Draw up a Budget
Regardless of your income, there’s a reason why so many financial professionals recommend following a budget. A budget helps you establish parameters for operating your household; understand if your goals are achievable in your desired timeframe and may help reduce stress in the event of an unexpected incident, such as the loss of a job or an injury.
When creating your budget, you will first need to determine what your necessities are. Ask yourself, “If I were to lose my job tomorrow, what expenses must I maintain to run my household?” This may help you realize that you may not need the premium cable package, but it’s necessary to keep meeting your necessary obligations.
After determining your necessities, you can build into your budget the savings goals you previously determined you wanted to achieve. Compare the two and any additional funds leftover that can be used for expendable expenses.
Make saving a culture
One of the biggest benefits of saving early and regularly is the power of compound interest. If given the choice, most people would choose to spend less money on achieving their goals so that they have more money to pursue their passions in life. Compound interest helps the money you put away grow faster due to interest building upon itself. You can make your money work smarter rather than harder to pursue your goals.
If you procrastinate and delay saving, you not only lose out on your money working for you, but you also make it harder on yourself. You will also have less time on your side, so you will have to save more money and may have to increase your tolerance for risk to achieve your goals.
Seek professional advice
Working with the right professional may help make your financial journey less stressful, save you time and instil confidence that you are on the right track towards achieving your goals.
See yourself as a professional athlete, who needs coaches and trainers that keep you focused on the critical areas for success. These coaches would deplore their experience and expertise in training with others to help you work more efficiently and more effectively. To secure your future through financial discipline, you need a financial expert who would guide you aright and curtail your excesses.
A financial advisor can serve as a financial accountability partner, providing ongoing guidance, support and advice. It’s easy to slack on your budget or slip up on following your goals when you don’t have someone holding you accountable. Find a financial advisor you trust to help you stay on track and provide advice when you need it.