Do it when things are good, to protect you when things are not so good…
Admittedly, I heard this quote while watching an episode of Jane the Virgin on Netflix recently, but it really stuck with me! It can apply to so many scenarios, especially if you’re switched on to saving for your future….
It can be relevant to Paying off Debt … For so many years I have been in the fortunate position of being able to pay good chunks of money off my debt every month… But did I? Simple answer is NO. I paid minimum payment, saved when I needed to, but for the most part – wasted money. Wasted money on food, on clothes, on shoes, on “things”. This extra money, money that was not being spent on necessities, was going down the drain. Had I been making a conscious effort to pump this money into debt, I would be much further down my debt-free path. Now I am focused, and I have a solid plan in place to pay off all of my debt – I am tackling the debt while things are good.
It can be relevant to Saving Money… It seems so obvious to say it, but save money when you have it. If you set a budget for something, and come in under budget – save that extra money. It could be going €10 under on your grocery budget, it could be that you budgeted €80 for the Electricity bill and it was only €65. Whatever extra money you find yourself with, just save it. If you’re given a refund on something, given money as a birthday present, a bonus from work – whatever it might be; just save it. I can’t get over how obvious this sounds, but trust me this is not how I used to behave. It was almost a monthly competition to make sure that I spent every last cent every month before payday. As crazy as it sounds now, my future financial stability was so far down my list of priorities, that saving was just never my first choice when it came to money. Now I am focused, and I have multiple savings plans – I am saving money while things are good.
It can be relevant to Pension Plans… Perhaps the most fitting for this quote – pay into your pension while you can/are still working, until you can’t/retire. In the last census in Ireland, the figures showed that only 56% of employed people have a pension, outside of the state provided offering. No matter how small or large an amount you can afford to set aside each month for your future, put it into a pension. If you contribute to your employer’s pension scheme, your employer will likely (in most cases) match what you are putting in, up to a certain amount/percentage. If you are not joined up to this, you are essentially turning down extra pay. Not only that, but you will also get tax relief on what you contribute. This means that if you are on the higher tax bracket and pay €100 into your pension, your salary will actually only reduce by €60, with the other €40 paid by the Government. If in this example, your employer was matching your contribution – €200 would go to your pension, still with only €60 coming from your salary. We’ll talk more about pensions another day, but as I reflect on this quote – pension contributions really are one of those things that we need to do while things are good.
It can be relevant to Budgeting… Tracking your spend is great, but planning your monthly budget before each month begins is going to help you a lot more. By taking some time to sit down and plan all of your bills, expenses, savings, debt payments and upcoming events for the month, you will have a clear picture of where your money will go that month. You will be less likely to overspend, when you have taken the time to allocate your money to each ‘bucket’. So work on your budget when things are good; i.e. when you receive your income, so that you are protected when things are not so good; i.e. the end of the month.
So really, this innocent quote, picked up from watching a tv show, can apply to so many things that I am working on in my life at the moment. I plan to go into more detail on a lot of these topics in future posts, but while that quote was playing in my mind I wanted to share some thoughts.