People often see money as an obstacle to living their dream. I am more interested in looking at how you can use money as a tool to build the life you want. My top two pieces of advice in this arena are: 1) Start saving for your long-term goals now. 2) As you go through life, write down your dreams and brainstorm ways to achieve the outcome of those dreams without spending a fortune.
How to Start Saving
No matter where you’re at in life, no matter how old you are, start saving. Even if it’s $10 a month. Something to build the habit. Then, every time you get a raise or bonus, increase that monthly savings amount. Having a percentage come out of your paycheck automatically is the best way to build savings, because then you’ll automatically save more as your earnings increase over the years.
If you are just starting out, I am a big proponent of building an emergency fund. If you have $0, save up until you have 1 full month of expenses. Then 2, then 3, and so on until you have enough savings to cover 6-12 months of expenses. Next, create a sinking fund. Set aside money for predictable expenses like car and home maintenance. Then, once you’ve established those safety-net funds, you can begin putting money toward things like:
- A new car fund
- A college savings plan for your kids
- Your vacation and travel fund
- Your financial independence goal – This one’s especially important!
Saving for Financial Independence
If you are closer to retirement, really look at your life and expenses. If you cannot save enough to meet your financial independence goal, look at how you are spending your time and money and ask yourself, “Knowing what I know now, would I make this decision?” Brian Tracy says that if the answer is no, get out of that situation as fast as possible to avoid wasting your life.
Here are some ideas that may help you reevaluate your spending:
- When Calculating Financial Independence, Focus on Outcome Not Amount
- 3 Potential Ways to Free Yourself from Unnecessary Monthly Expenses
- Fixed Vs. Variable Expenses
- Houses Eat Money and Time
- Creating My Own University Experience, For Way Less
Creating the Life You Want
Wherever you are in life, don’t be afraid to get creative. For example, my favorite magazine is International Living. Every month it highlights people who have chosen to spend part or all of their time in other countries where it is far less expensive to live—sometimes earning income along the way by teaching English, working abroad, working remotely, or having rental income. Some of my clients have done this, too. Through these people, I have observed that the challenge and thrill of figuring out how to live your dream can be as rewarding as the things you see and experience along the way.
Don’t be afraid to dream, and don’t be intimidated. Be prepared to take action. Be creative and find a way to make your dream happen.
My dream and vision for my life has evolved massively over the past 5 years. Please let me know if you want to brainstorm! It’s one of my favorite things to do. Email Carlo@IntegralWealth.net.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.