What’s your drink? Mauby or champagne

Champagne taste and mauby pocket. Heard that before? It means that your financial desires exceed what you have available to spend. It’s a reality for most people in their teens and early 20s, but, if you play your cards right, you can upgrade that mauby pocket to champagne-buying status. How?

Paying yourself a salary out of your salary BEFORE you do anything else.

Getting your hair and nails done, buying rims for the car and going to every all-inclusive fete are all cool, but, it would be even cooler to buy your first car by 28 and house by 31. However, to accomplish that, you must distribute your salary in such a way that your important goals are taken care of even as you live and enjoy life as a young adult.

One way to do this is to ensure that at least 10% of your salary goes to savings every month. Your future quality of life is worth at least that much. Of course, if you are dreaming bigger dreams, you can always increase it to 15 or maybe even 20 per cent of your salary.

Now, once you have committed at least 10% of your salary to you, you must then live within the remaining 90%. Do not spend money that you don’t have on things that you don’t need. Sure you may wish to party or travel at this age but make sure your spending does not compromise your longer term goals and ambitions. In other word, don’t dip into the savings for your house down payment to pay for a Carnival Costume.

The next step is to establish your Emergency Power Supply. This fund safeguards your financial security and gives you confidence and flexibility. Look, life is uncertain. You can lose your job tomorrow or be forced to take extended leave for circumstances beyond your control. Would you have any money to maintain your current lifestyle should such a situation arise? Or would your social life and everything else come to a grinding halt.

Your supply should equate to at least 6 months of your salary. This will give you 6 months to leave a job and start your dream business or put things in place in the event of an unforeseen circumstance. Your emergency power supply provides a financial cushion and gives you the power of choice. If you have 6 months of salary saved, you have the choice to leave an unscrupulous or exploitative employer and be comfortable for the next 6 months.

The faster you build up this fund the better. If, in addition to your 10% savings, you put another 5% or 10% to your Emergency Power Supply, you won’t regret it.

Savings is not a bother but rather a wealth-creation resource that will allow you to be self-sufficient and have more financial choices and freedom. It will also determine whether you drink mauby or champagne?

PS: We like mauby but it’s good to have the choice.

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