What is the first priority for strong financial foundation?
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Saving is an essential financial practice to ensure our long-term economic stability. However, many times we relegate saving to the background, after having covered all our expenses, whether they are necessary or unnecessary. It’s time to change this mindset and make saving a priority from the start.
What is the first priority for strong financial foundation?
The first step to start saving effectively is to create a detailed budget. This budget should include a specific item for savings, which should be treated as an unwavering commitment. In this way, saving will become an automatic routine, similar to paying taxes.
Let’s take the following case as an example: Suppose you earn $200 a week after paying taxes. You must adopt the role of your own tax agent and assign yourself a percentage destined to savings. In this case, we will use 10 percent as a reference. Thus, you should automatically set aside $20 and deposit it into an online savings account. It is important to realize that this money was never really available to spend.
It is natural for this process to be somewhat difficult at first. Your mind will be confronted with the harsh reality that you are not receiving the full salary promised to you. However, over time you will get used to this dynamic and understand that it is an effective strategy to ensure your financial well-being. In fact, your mind is already doing a similar job, because even though you know how much you should be earning, the money you receive is “X” salary minus applicable taxes and deductions.
Systematic saving has numerous benefits. First, it will allow you to build an emergency fund that will provide security in case of unforeseen events or financial difficulties. In addition, regular savings will give you the possibility of reaching long-term goals, such as buying a house, financing your studies or retiring comfortably.
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Once you’ve gotten used to saving systematically, it’s a good idea to explore investment options to grow your savings more effectively. Consulting a financial advisor or researching different investment vehicles will help you find the most appropriate option according to your goals and risk tolerance.
Saving should be a priority in our personal finances. Establishing a budget that includes a percentage destined to savings, treating it as an unavoidable commitment, will allow us to build a solid financial future. Although it may be difficult at first to give up a portion of our income, the long-term benefits will outweigh any initial sacrifice. Remember that regular savings provide us with stability, security and the possibility of reaching our most ambitious dreams and goals.
There are numerous books that can give you a deeper perspective on the subject of saving and personal finance. Here are some recommendations:
- “The Richest Man in Babylon” by George S. Clason : This classic of financial literature offers lessons on saving, money management, and wealth accumulation through parables and practical teachings.
- “Rich Dad Poor Dad” by Robert T. Kiyosaki: In this book, the author shares the financial teachings he received from his own father and from a friend of his father’s. He offers a different perspective on financial education and how to develop wealth-building skills.
- “The Little Book of Common Sense Investing” by John C. Bogle: This book focuses on long-term saving and investing, providing practical advice on how to build and manage an investment portfolio intelligently and with common sense.
- “The Intelligent Investor” by Benjamin Graham: Considered one of the most important books on investing, Graham presents principles and strategies for investing prudently and minimizing risks in the financial market.
- “Man’s Search for Meaning” by Viktor E. Frankl : Although not specifically about finance, this book offers a valuable perspective on purpose and meaning in life, which can influence our financial decisions and how we value value. savings and wealth.
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Remember that these are just a few examples, and there are a wide variety of books on personal finance and saving available. You can choose those that best suit your needs, interests and level of knowledge.