Saving for a goal
July 11, 2015
In my-full-of-projects and chaotic mind there is always a voice that tells me: you need a way to pay for all of this. There are few things you can really do without money. When I finally clear my head and decide to pursue a long term project, the next step is to find out the budget for it. Here are a three ideas on how to achieve the funds you need to finance your dreams. I applied them and thanks to that I am able to move to Australia.
Be realistic about the time to achieve your budget
To go to Australia you need a minimum of 5000 USD (including airfare), and you can apply for the visa I am applying before you turn 31. I calculated I needed at least 2 years to save that amount, and I was around 25. Also, the visa allows up to one year to enter Australia, so that gave me additional time. It took me more time since I had expenses related to my citizenship process and other trips. It was feasible for me to do it.
It would be short sighted to invest on a project when the numbers do not match. Often people take a risk without thinking about things going wrong. I have faith things will go well. Once I am there I will figure it out. That type of mentality can be detrimental and could end up costing you even more. Think carefully about your plan, do the math or ask a geek friend of your to help you. It pays off.
30% and 50% saving rules
You should always consider if you are able and how much you can save. Your health, security and stability should come first before any non necessary projects. Once you have a regular income and figure out your living expenses, you can consider savings.
With fixed and steady income (for example a job with guaranteed monthly salary), trying to save about 30% is a reasonable move. This percentage can be applied to the whole income or after living expenses are deducted. Doing it the first way can make you trim your budget and help you filter out unnecessary purchases.
Occasional earnings can be saved at a higher rate. Saving 50% of cash gifts, freelance works, and other ancillary income is a good choice.
Make it hard to spend your savings
In modern consume culture we are unfortunately littered with ads to buy things. Things we don't need. Do not let your savings be wasted on items you will use once and discard or on a vice. A smart way to handle this is to distrust yourself and block access to your savings. There are a number of methods:
- Certificate of deposit: frozen in a bank account for a certain amount of time
- Hard foreign currency: hard to spend because you need to exchange it first
- Offshore bank account
Patience, planning and careful savings will help you move closer to your goal.
My savings were mentioned in A new path for me, so I can mark it as done, leaving:
- Traveling and tech gear shopping