Most of us weren't taught how to manage our money in school. So, let's talk about another saving mistake you might be making, and that's forgetting to make saving a part of your budget.
When we think about budgeting, our attention is oftentimes focused on what we spend our money on. And this makes sense, right, because life is expensive. And if we want to reach any of our financial goals, we have to make sure that we keep our spending in check.
But we often forget to budget to reach our financial goals. Saving shouldn't be an afterthought. And I'd argue that one of the first things you should do every time you get paid is send some money to your savings account.
When building your budget out, the first thing you always look at is your income compared to those expenses that you're going to have to cover every single month. Things that are going to have to get paid regardless of what you have going on. Things like your mortgage, or rent, food, insurance, utilities - all those things. And after you compare these two-dollar amounts to each other, you'll be left with what they call discretionary income.
This is money that you get to choose how it spends. You know, your choice. No other obligations are left out there. But I want you to take a percentage of that money you have left over and add it to your budget under the category of saving. And then take it a step even further and set up an automatic transfer of this dollar amount to occur right after every single payday.
This way you'll never forget to set aside some money, and you won't let saving become an afterthought.