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Save For The Future

By J. Jones, Expat-Adventures

If you are not paying for your living expenses there is no excuse not to have a good savings plan.  Instead of buying that iPod and big screen TV right off the bat, start saving your money.  You can conceivably save 40% - 70% and still be able to have a good time (unless you are working in a War Zone where you pretty much just sleep and work).  If your living quarters dose not already have a TV get a reasonably priced one and if you are into video games get yourself the system you want.  The video game might be a little expensive but if it keeps you from going out a lot it actually saves you money.  If you can limit going out for entertainment to about once a month you can save a lot of money.  If you are a person who dose not like to sit at home look for things that you can do that dose not cost you an arm and a leg to do them.  Join organized activities like Hashing or sports.

When you set your direct deposit up have some money go to an account you will use for day to day expenses and have the rest go directly to a savings account that you do not touch.  When you get a raise it will automatically go to your savings account this way.  Since you will not see the money that goes to your savings account you will not miss it.  The way I have my savings account set up I cannot get money out of it unless I make an online transfer to my other account and I have to wait a few days for the transaction to take place.  This stopped me from making purchases using my savings if I saw something I wanted while I was shopping.  By the time I got home I either decided that I did not need it or if it was something I needed I would wait till the next payday or make the bank transfer.  By doing this it cut down on pretty much all of my impulse buying.  After a few months I just did not have any impulses to buy things any more.  What I basically did was kept my life style of living paycheck to paycheck when I did not have to.  My savings was building up and I lived off of what percentage of my pay I had sent to my other account.

At the end of the year take a look at how much you were able to save and if you want to take 10% and buy that nice TV you want or go on a nice little vacation you have always wanted to take.  Every one says it is important to build up your credit score and it is nice to have good credit but if you see something you can’t afford unless you have to use a credit card you can’t afford it.  Do not buy things on a payment plans unless it is something like a car if by chance you need your own car.  If you get so much a month for a vehicle allowance it is cheaper to buy a car and use the vehicle allowance to pay it off.  You may see a car you have always wanted but go for the Hyundai instead of the BMW.  Wait to buy that car you have always wanted until you are retired.  When you buy a vehicle like a Hyundai you can have that paid off in a year or two rather then taking a four year plan, you may even be able to pay cash on it if you want.  Remember though if you are provided a company vehicle and you probably will there is no need for your own car.  If the company vehicle is shared and you can only use it once a week for personal use start using a taxi on days you do not have the car.

Once you have a good amount in your savings account you can start deciding on how to best invest your money.  A savings account has a rather low interest rate and by putting some of your savings into other investments you can start having your money work for you.  Once you have a savings account built up and you have an extra $10,000 to invest you should start doing your research.  Maybe you want to look at the stock market and mutual fund or maybe you want to buy a CD or bonds.  One thing you should invest in every year is an IRA that you can deduct your investment from your taxes if you have any.  If the foreign earned income exclusion takes care of your whole yearly income it is still good to start an IRA.  I did not start one until I made enough money where I had to find tax deductions but wish I would have because that would have been more money I would already have invested.

A good savings plan is your door way to a better future and the earlier you start the better.  Once budgeting becomes second nature to you, and it won’t take long, you will start seeing the savings build up.  Remember that investing your money takes a lot of research and if you decide to invest in the market but you don’t have a lot of time to pay attention to the market a mutual fund or an index fund could be a good choice.  Remember an early retirement starts with your savings account and your ability to budget.