Create discipline, create savings habits. For working people, these things seem easy, but in reality, most working people cannot do it because of many factors that all result from incorrect spending behavior.
The result is no savings, causing many people who want to be investors to complain that they don’t have money to invest, causing them to miss out on good investment opportunities many times. Many people want to reduce their taxes as much as possible by buying SSF or RMF funds, but they don’t have enough money to buy those funds for the benefits of tax reduction or for retirement investment, causing them to pay higher personal income tax (some may have to pay more) and not have enough money to use in retirement.
Or even when faced with a career or occupational crisis, such as losing a job, especially this year, since the beginning of the year, we have seen that the arrival of Covid has caused many businesses to close down. Some businesses have had to reduce employee salaries, and some have had to lay off many employees.
“There is no certainty. Everyone is ready to be fired at any time.”
For us working people, if we don’t have enough savings, we will also have difficulties. If we face problems such as a 25-30% salary cut, will we still be able to cope? Will we still survive? Or if we are laid off, how many months will we be able to survive until we find a new job? Have we ever thought about these issues?
These problems all come from the same root cause: “no savings” and no financial planning. If we want to have savings and continue to save, we must have “discipline”.
So if we still have a job and we know that saving is important, now let’s start by setting goals, building discipline, and creating a habit of saving with these 4 methods.
1. “Keep before use.”
How much should we save?
Let’s say if you’ve never saved before, start easy by deducting 8-10% from your salary. But if possible, 20% is great. Or set a goal with the same amount of money you want to save each month, such as 500 or 1,000 baht.
Open a fixed deposit account (because the interest rate for fixed deposits is higher than savings deposits). When you get your salary, transfer your savings into the fixed deposit account you opened. This is the easiest way.
Or invest your money to make it grow. It could be stocks, bonds, or various types of mutual funds, which will have different returns and risks. If possible, use the DCA (Dollar cost average) method, which is to automatically deduct our money to invest every month. This will help create good investment discipline.
Believe it or not, in the first 1-3 months, it may be a bit difficult. But believe me, once you start to make it a habit, build discipline, and create a saving habit, when you start to see the numbers of money that you save or invest, you will be more proud and definitely want to save more or invest more.
2. “Make a simple income and expense account.”
To create discipline and create good savings habits, we should keep a record of our own income and expenses. Actually, keeping a record of our income and expenses is not difficult at all. It is just that we feel reluctant to do it because we do not want to know how much money we have spent or what useless things we have spent.
The method doesn’t require anything complicated. Just record your daily expenses, such as travel expenses, food expenses, or various items. It would be even better if you kept receipts for everything you spent.
When we keep recording our expenses (income remains the same every month because it comes from our salary, except for some people who have multiple sources of income), we will start to see where we spend our money or what we spend on things that we shouldn’t use, things that are necessary (must have) or extravagant (want).
After that, we can plan measures to reduce or adjust expenses that we think are excessive or should not be paid.
Believe it or not, after recording your income and expenses for about 3 months, you will immediately start planning to save money, such as changing your mobile phone promotion, changing your commute to work, or canceling unnecessary expenses, such as switching from drinking expensive coffee to a cheaper one or making it yourself.
3. “Create and maintain financial liquidity”
At the end of the year or the beginning of the year, many people have already received their bonuses, and many others are about to receive their bonuses. Even if it is a small amount, you should take this opportunity to set aside half of the money from the bonuses you have already received or are about to receive to set aside as emergency funds.
Emergency funds here are not savings, but money to use in case we or our family members get sick, if we don’t have health insurance, we need money, or if we make a mistake and lose our job, we still have money to use while waiting for a new job, etc.
Emergency funds should be at least 4-6 times your average monthly expenses. In the past, it was said that emergency funds should be at least 4-6 times your average monthly expenses. But now, because the circumstances have changed, how much to save for an emergency depends on your career and lifestyle, and how much risk you have of losing income.
For example, if we have an average monthly expense of 10,000 baht, the emergency fund should be at least 40,000 baht. However, if our job is in an industry that is currently at high risk of unemployment, we may need to save a little more emergency money, just in case we lose our job and jobs may be hard to find.
If you don’t have enough now, gradually save some. Use the same principle as saving money: gradually deduct from your salary and put it into a savings account to use as emergency funds.
4. “Create a plan to make money work through investments.”
As mentioned earlier, we can save money in bank deposits or invest it.
However, if we only deposit money in a bank, we must be careful about inflation. Simply put, inflation is higher than the interest rate on deposits. Therefore, investing will help reduce this inflation problem.
Or we can start investing simply.
The first type is investing in a side job by trying to explore yourself to see what you are good at and find a special job that you are good at. Sometimes you may earn more income than you thought.
The second type is to let money work, which can be invested in mutual funds, such as investing in mutual funds such as equity mutual funds, bond mutual funds, real estate investment trusts, etc.
Or we may choose to be tax deductible, such as investing in SSF or RMF, which provides many benefits, such as increasing the amount of money to grow. Some funds also help with tax deductions and planning for future retirement.
Or if we may have extra money (savings) from good management, from managing expenses, we can also use this difference to invest.
Here are 4 important methods that are not too difficult for working people to create goals, create discipline, and create savings habits that all working people should have to fight the crisis and to achieve financial goals and retire easily in our own way.าหมายทางการเงิน และ เกษียณแบบไม่ยากในแบบของเรา
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