How To Save For Huge Projects
Many people want to save, but over time they have said that it has been difficult to do so because of unforeseen circumstances. Success for many people is measured on simple yardsticks; a car, a house, a land, or the ability to travel the world with no job responsibility beckoning for their attention.
There are the fortunate few who do not have to worry about the capital or the means to get these yardsticks of success, as it may have been handed over to them on a platter at birth or at a certain age. Either through a trust fund or an inheritance. But you need to be aware that it is just a fortunate few.
According to the United Nations, the total population of people on earth is 8 billion. Credit Suisse a bank in Switzerland made a publication stating that there are 56million people in the world who are 1 million dollars rich. if these people work harder, they may become more than a million dollars rich and eventually set up trust funds for their kids or be able to leave them inheritances. Perhaps they are the already fortunate few who were left with an inheritance and made good investment decisions to grow their fortune to a million dollar worth, But even so, they make up 0.7% of the entire population.
Therefore if you are not among the fortunate few and the achievements listed above are part of your yardstick for success, then there are ways that you can save for them, without depriving yourself of the present pleasures of life, like food, hanging out with your friends indulging in a cup of coffee and paying other bills. the key to this is called budgeting.
According to Wikipedia, a budget is a calculated plan over some time. it can be a financial plan but not always financial. from this definition, we can infer that budgeting on personal finances is a calculated plan on money that belongs to you over some time.
How Do I Make A Budget?
Making a budget simply means that you plan what you will do with your money when it comes. This can go on until it becomes a habit so that on receipt of any amount of money, your first instinct is to plan for it instead of outright spending it.
There are methods to choose from when you want to make a budget but if your goal is to save for a project, the recommendation is to split your income or available money as you earn it into three and into percentages.
Your budgeting largely depends on the duration that you want to execute the said project. Here are the things you need to do first:
- count how many days are in that period.
- know how much it will cost you to execute that project, making room for inflation for when that time comes.
- calculate how much you need to set aside every month.
- calculate what percentage of your income it is.
- Determine how that will affect your other spending.
After you have done this, you have to split what is left of your income into two. 10% of what is left for emergencies and then the remaining for day-to-day activities and other bills. Bear in mind that your emergency fund is non-negotiable as it will be your lifesaver when unforeseen circumstances rear their ugly heads.
Where Do I Keep The Money For The Project?
This is a good question because if you set money aside for something, it should not lay down but work for you. Regardless of the duration of your project execution, your best bet is Everydaymoney.
What's more interesting is that you can put your whole monthly income into Everydaymoney and choose a template that matches your plan above. That way, it becomes an automated process, just like the app was designed for, and you will not have to do the calculations every other month.
Once the money for your project enters your Everydaymoney saving wallet, it begins to yield interest every day. so that even though you accounted for inflation in your projection, by the time you want to use the money, it would have yielded interest so much that you may not need the spend the added money of the original cost due to inflation.
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