Starting from zero

By on June 29, 2009

Photo © Elena Derevstova

OK, so you have just tied the knot and taken the steps to starting a family of your own. A few years into your working life, you probably have so many ideas about spending than saving money. Although love is the main foundation of a union, looking after the basic needs of a family is an essential part of the commitment. Many marriages fall apart and end in divorce courts because of lack of shared goals. Remember the “for richer or poorer in sickness or in health till death do us part” marriage vows you both made? Avoid the pitfalls and start asking yourself these questions.


1. Should both of you work?

Your most valuable asset is your earning power. The earlier you save money, the earlier the prospects of becoming financially independent happens. How much to earn to suit your family’s lifestyle or realize a dream depends on whether each one of you work.   


2. Do you own a home?   

Renting is not the most economic option. Owning a home is. But before you can own, building an equity comes first. Most banks would give a loan only if borrowers have the ability to put in at least  20% – 30% down payment. 


3. Do you have cash savings?  

The economic recession we are now living in is a wake up call for most people without savings. Living in the most expensive cities like Tokyo, one should have at least 6 months’ worth of living expenses saved or put in a time deposit. Check out banks that will support your needs in terms of a higher rate of interest.


4. Do you have a credit card debt?

If you have been enjoying vacations and shopping sprees using a credit card, chances are that paying off the balance would require a longer time than you ever imagined. Avoid at all costs being locked in a long-term credit.  


5. Are you keeping expenses down to the budget or are  you overspending?

You can keep tab of daily expenses by jotting them down daily so you will know where to penny pinch to hit your target savings.


6. Are you ready to have children?

Having children is a joy and makes the bond even stronger. However, raising a child requires shared commitment from birth and giving up a lot of things, like a mum’s job for parenting’s sake. This could affect your savings timetable.


7. Are you investing to retire rich or early?

Applying sensible risks to get higher returns for your money is better than putting them in a savings account. Go for stocks, invest in real estate, or start a business.

Do not know how? That’s where investing in knowledge comes in. No one is too old to learn and experience.   


8. Lastly, how disciplined and determined are you?

People with weak determination easily fall prey to temptation to spend money unwisely and find it hard to commit to saving. Stashing cash need not be stressful if you know which expenses to avoid. If you cannot  say no to an incidental expense, be sure your income can cover it without affecting your savings plan. The most rewarding thing when you reach your senior years is how early you have gone out of debt. Check your priorities and see that they are aligned to your goal.


Happy savings!

About Melanie Vespia