Getting my piggy bank in order

For the past month I’ve been thinking about stuff I want to achieve financially aside from making  some personal life decisions.  Today with it being close to the new year and all I thought it apt to discuss my saving strategy for 2017.   No time like the present!

Having no debt to pay off, and not planning on obtaining any more in this life time, it’s a different motivation when saving if one doesn’t have goals for their money.   It can lead to mindless unnecessary spending to which I am vastly guilty of, and while I love to spend, at the end of the day I don’t need anything more than a roof over my head and food in my belly.

This year I’ve decided to give my money some better defined goals because while I want to do many things, I cannot do everything that I want.  It makes for far better motivation and gives an aim to my goals without the ‘just cause’ at the end of it.

So I’ve decided to divide my savings goals into four categories:  Slush, Travel, Retirement and Emergency Savings.  Eventually further education will be a part of it but until I decide exactly what I want to do in that arena I won’t be allocating a savings goal just yet.

Let’s get to explaining the why and what for…..

Slush Savings

This is the sum total of my annual estimated expenses.  It covers such things as car maintenance and registration costs, dental check ups, licence renewals plus a few other pesky costs that arise once a year.   My estimate is based on the previous year total and I’ve divided it to be saved per pay cycle.

Yes as ironic as it sounds I am essentially saving money in order to spend it when the time is due!

This savings category makes plenty of financial sense.  I may gripe about costly stuff and how unfair the world is sometimes, but having this fund means not taking on debt and not accessing my emergency fund for something that has been completely expected to come about.

It will also be my third year saving into this fund, and I cannot see it ever changing, personal circumstances excepted.  If anything I will always recommend this as part of ones budgeting strategy.

Travel Savings

Without stating the obvious you can pretty much guess what this covers.  My travel costs to destinations currently undecided.  This will actually be the first year where I will put it into practice.   While I have travelled a bit in the last few years, I’ve always booked first and paid as and when I needed to.

This time it will be the other way round and financially better prepared for.  It will also be a lot less than I have spent in 2016 because I plan to travel some of Asia in the coming year a much cheaper destination than USA.

Retirement Savings

In Australia if you are getting paid a certain amount a year, it is compulsory to save for your retirement.  This is called superannuation where I choose the fund and have my employer pay 9.5% of my gross wage into.

My retirement savings however is entirely separate to this.  I can choose to contribute more to my superannuation, but I don’t wish to do that, because it all comes down to control and the fact that I have little control over access to it.

At the very least I want to be able to retire in my early 50s.  Earlier would be better, but time is not on my side and it isn’t likely that I will have the opportunity to earn millions of dollars.  My aim is to reach half a million (in this fund) by the time I am 45 and by 50 that number to be close to a million.

Better late than never!

Emergency Savings

I wrote about my Panic fund not so long ago.  Currently it is as full as I want it to be and most of it will be heading into the retirement fund, because after much research I have realised it is currently not working for me as hard as it could be.  I will be putting it to work where it will be most effective and this is earning me more money.

My emergency savings will therefore only be getting the smallest piece of my earnings for this reason.

And there you have my planned savings goals for the year.   Have got your piggy bank in order?

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