How to Create a Long-Term Savings Plan
You’re Going to Learn
- Austin’s best tools to find good stocks to choose from
- How to save money to invest in the future
- What can you do today to set yourself up for a profitable future
Creating a Savings Plan
Step 1: Spend Less Money than You Make
The first step to making sure you have money to invest is to make sure you have more money coming in than you have going out.
Easier said than done, right?
It can be easy to lose track of spending. I’ve created a spreadsheet and video guide to help you spend money consciously while creating a plan to save and invest accordingly.
Step 2: Build an 8-Month Savings Cushion
If you filled out the spreadsheet mentioned above you probably have a good idea of how much money you or the household spends on a monthly basis. On average it takes about 8 months to find a job when you lose your old one which means we need enough money to cover all expenses for that period of time.
Your savings goal would be eight times your monthly expenses. To make the most of the money in your savings consider giving your money the opportunity to grow in a high-interest savings account.
Bonus: If your employer matches your 401(k) take advantage of the match, it’s free money.
Step 3: Invest the Remainder
I’ve made the mistake of saving too much money instead of investing.
We actually lose money by having it sit in a savings account because of inflation. Any extra money past your 8-month savings cushion should be invested long-term if you don’t anticipate spending it within the next 3-5 years.
There are several ways to invest your money to make it grow.
You can follow Austin’s advice in the podcast or you can use a more hands-off approach to investing such as Wealthfront.
No matter how you choose to invest in having a long-term plan for your money is important for your financial future.
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