When times are tough, it’s hard to imagine better days, but without a long-term savings strategy, those better days might never arrive.
Alexandria Blaelock, author of Ms Blaelock’s Book of Holistic Personal Finance says “The long-term, is a bunch of short-terms strung together. In just the same way, a long-term savings strategy is a bunch of short-term strategies in a row.”
Here are Blaelock’s tips for developing a long-term savings strategy:
- Know what a strategy is: Strategy is a fancy way of saying you have a series of steps to achieving your goal, whether that’s checking the mailbox or buying a house.
- Know the difference between long and short term: When it comes to planning, long-term is generally five to ten years, and short-term 12 months or less. You can see that the long-term is made up of a collection of short-terms.
- Think big, then work backwards: Say you did want to buy a house; you check the prices and you find it will cost you half a million dollars. You discover you can borrow $400k, but need to find $100k upfront. How are you going to get that money together as quickly as possible?
- Start small, then work forwards: Right now you might only be able to save $10 a month, so start there and think about how you can find more money to save more often.
- Think about how you can make your savings grow: When you reach the limits of how much you can save, it’s time to think about how you can grow it. Start with a jar for loose change, and when you reach the right threshold open an interest-bearing account. Keep saving, and when you reach the next threshold, upgrade to a high-interest account. Then a managed fund, or maybe some company stocks.
Alexandria’s tips on developing a long-term savings strategy will help you save more and earm more on your savings, and reach your goals sooner.
Click here to find out more about Ms Blaelock’s Book of Holistic Personal Finance, or visit Alexandria’s website.
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Holistic Personal Finance
Advice on managing wealth usually means sacrificing things that make life worthwhile. Ms Blaelock's Book of Holistic Personal Finance shows you how to manage your money according to the life you want. You can enjoy lattes, lunches with friends, and a prosperous tomorrow.
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