Young engineers, whether you have monthly amortization for your car, condo mortgage or college loans, you must fix your finances properly
Managing money is a hard concept for many to grasp. Most people think it involves a bunch of complicated steps and business knowledge, which many of us have no time for. But at the same time, it’s a necessary skill to have. Money runs our capitalist world, after all. Having money on hand is also your safety blanket when the time comes and you are in need of funds. Or maybe it could one day be the deciding factor to living the life you’ve dreamed of, like starting your own company.
But how do we do that? Where do you even start? Well, Nicolas Cole, writer at Inc. Southeast Asia, has studied finance as a hobby for 5 years. He has interviewed investors, bankers, entrepreneurs, etc, and he says that it all boils down to 1 thing: savings.
And no, not the “savings for a vacation for Hawaii” kind , he means savings for career investments, emergencies, and retirement.
Well, how do you save in the first place? Well, think of it this way: If the government suddenly increased your tax by 10%, you would do it. Yes, it means either working hard to earn more or spending less, but you would have to do it anyway.
This is the kind of discipline you should have when saving.
Most people live paycheck to paycheck, and when you’re fresh out of university with graduate college loans and bills to pay, it’s easy to fall into the trap of “I can’t afford to save right now”.
But even if you couldn’t, again, if the government increased taxes by 10%, you would have to do it anyways.
Always circle your thoughts when saving to that one sentence. Keep your discipline.
So the goal is to eventually save up to 10% of your entire monthly salary. Let’s say you earn $2,000 every month. You can start with $50. Get in the habit of doing so. Have an automatic withdrawal from your primary account to your savings that will transfer than amount. Then, once you’ve gotten used to the habit, up the amount. Go for $75, then $100, then $125, then $150. Soon, you’ll be able to save $200 per month, which is 10% of your monthly salary.
Once your money is there, don’t touch it. Don’t even look at how much you get there. Once you start to earn more, save more to reach that 10% of your salary goal.
In a few months, you’ll have some savings in your account, and in a year’s time, when you’ve started to climb up the career ladder and earn more, you’ll have a significant balance that’ll just grow more and more overtime.
That money is something you should use in only the direst of situations, or when you know it’s going to help you take your life and take a big step to achieving your goals.
It all starts with a 10% every month.