Dear Reader, have you ever considered why you should put something away for a rainy day?
When you’re doing well and have a good income, it’s easy to imagine that the good times will go on forever and you can enjoy it all with the expectation that money will continue to flow in your direction without interruption.
But life’s not like that. Into every life, some rain will fall, as the saying goes.
Good times don’t last forever. Life tends to be cyclical, like the changing of the seasons.
The time to repair your roof is when the sun is shining, for winter will have its day and we must be prepared for inclement weather.
Savings matter:
When you get paid each month you must set some money aside, separated into three accounts, as follows:
You must be prepared to pay those bills that come in regularly; you must be ready for an emergency. Equally, you must start creating wealth, so that one day you’ll be able to retire.
Bill Payment:
You cannot live in the modern age without incurring bills.
Whether it’s utility bills, phone bills, TV subscriptions, mortgage payments or rent, credit card payments, food bills, repayments on a car loan, et cetera. You must set money aside to pay all those bills when they fall due.
Emergency Account:
As the saying goes, stuff happens.
And when stuff happens you must be prepared to deal with it. You must have an emergency fund you can tap into to deal with emergency repairs or even an unexpected interruption to your income. These things do happen.
Financial Freedom:
When you’re young, it’s easy to think that you’ll keep on working, if you must, to earn an income.
However, trust me, one day you will want to retire from work, or at least from the daily grind.
If you are to retire you will need some wealth.
The best time to start building wealth is when you’re young.
Start a 401K or pension whilst you’re young, pay into it regularly and with some luck and good financial management, you can enjoy a comfortable old age.
By starting young you will benefit from the magic of compounding. The impact of compound interest should not be underestimated.
Remember; it will rain:
Think of life in terms of the seasons and prepare accordingly.
Most people experience hard times at some point in their lives, particularly when they’re young.
You can be sure it will rain; the only question is when.
You will be able to weather the storm a lot better if you have a financial cushion in the form of some savings.
If you are lucky enough to have an income now, you’d do well to remember to put some of your income away for a rainy day.
It’s easy to squander your money thinking the good times will never end.
However, nothing lasts forever. So, my advice is, to be prepared.
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