It’s important to pay yourself first every month, it’s all too easy to spend more than you earn or just keep your head above water month to month. Paying yourself first means setting aside some money each month to build up your savings. Of course, this becomes really helpful in retirement, having extra savings can help you enjoy life to the fullest in your later years.
Saving Helps With Emergencies
Savings can also help with small financial e
mergencies like car repairs, or bigger life goals like a deposit on a first house. Studies have shown that people are quite bad at important but regular tasks such as saving. So doing it automatically each month can be extremely helpful and you can create a savings pot faster and quicker than you might expect, especially if your money is allocated to a portfolio that has the potential for growth over time.
Averaging Your Investment Cost
Regular saving comes with another benefit too, because you are steadily buying into investments, you are more likely to get an average price rather than entering the market at a single point when prices may be more extreme. This can lead to a smoother investment performance relative to investing a single lump-sum, which can carry more risk.
Tips To Save More:
- Make saving automatic. Set up a direct debit to save a little each month into a savings or investment account.
- It can be easier to save money that isn't part of your normal income. If you get a bonus or inheritance, try and save virtually all of it.
- Try and increase your savings steadily over time, it can be easier to adjust to this than trying to save a large amount all at once.