EP46 – Female Financial Independence Series : How to go from Budgeting to Saving to Investing

In this episode, I will be talking about how you can be smart with your finances and become a financial advisor for yourself. I will be sharing tips on how to budget your money, take a leap into saving your money and finally jumping into taking risks in investing.

You may be wondering, what’s the purpose of taking the leap from being a budgeter to saving and finally taking another leap to investing? Well, the straight answer to that is when we are able to build enough backup, there’s less panic at times of emergencies, unexpected issues and other fallbacks. 

Biggest question is, how do you start the leap?

Level one leap, this is where you will go from budgeting to saving. As a general rule, I would suggest that you have six months outgoings back up as part of your savings.

Level two, this is taking that final leap from saving to investing. Remember, before you start putting a high percentage of your salary per month into investing, you want to make sure you’ve got a good foundation. You want to be putting a percentage into your pensions enough to basically cover that future retirement date. Make sure that you tick the box of securing your pension first before anything else. Pension is considered investment only if you can have access to it over a prolonged period, say 50 years to totally enjoy it.

If you want to look at putting your money into something you could access sooner, then go for investing. As a general rule, 5% or 10% of your monthly income goes to an investment element. This best works if you haven’t got your ducks in a row. If you have, you can go as high as 20% to 30% spare from your monthly income. Although, this high percentage is equated to big risk so BE CAUTIOUS IN INVESTING ALL YOUR EGGS IN ONE BASKET STRAIGHTAWAY.

You know you’re ready to invest when you want to earn that confidence and make any changes or adjustments that you might need to put in place without putting your financial standing at risk. Always aim for reasonable investment, learn and educate yourself as you go and then grow. As you’ve learned, and as you’re growing, that’s when you can then increase the amount you invest. This is a basic rule so you can have greater understanding rather than taking all your money in one go.

How do you start investing?

• Look for the right platform that suits you. You can either pay for a financial advisor or DIY, manage your own finances. Don’t remove the charges and fees from the equation when looking into what suits you. Paying the fees may not be worthwhile because the amount they’re going to charge would actually take about 50 years before you get that money back. So be wise. 

Here’s a quick tip: when you decide to pay for somebody to make investment decisions for you, take ample time to review their charging costs and their portfolio performance. COME UP WITH 3 OPTIONS.

• Plan your strategy of how you want this money to work for you. The best strategy would be to go to where you’ve seen it work for you in the past. You can start with the services and financial guidance your trusted bank offers. This is a great starting point. 

You can also try some platforms in Google – trying looking up at  investing platforms, or stocks and shares or general investment accounts, or how do I start investing. You will not find a quick win at that moment. Don’t just pick the first thing that comes up, you need to start to understand what it is you’re looking at and start to increase that muscle of knowledge and education. Just start to absorb and understand the information. Be cautious, don’t make any decisions right away. 

Still unsure what next step to take towards your financial independence, grab a copy of my book called ‘10 WAYS TO ACCELERATE YOUR WEALTH’. One of those areas we talked about in the book is investing, saving and budgeting. Start now and take the first step you could start doing for your finances so that you can increase your wealth and your financial independence that you might be looking for in your future.

You can also book a FREE 15 minute coaching consultation, and be sure to register and check out our free planner training series that will help you get the most out of our journal and create the financial future you’ve been dreaming of.

Listen to the full podcast here.