The very first time you receive a paycheck, pay yourself! What do I mean by that? Well, you need to get into the habit of seeing your monthly paycheck not as a definite, but as a means to help you establish a life you want, to continually sustain you no matter what happens in life.
Create a safety net
The Covid-19 pandemic has upended the working environment in many ways. Yet, technological advancements and the emergence of the gig economy have long threatened to do that. Finding permanent or even steady employment is getting harder, which is why having money you can fall back on during transition times, will be the difference between making decisions that are best for you versus trying to survive.
During the past seven years of my working life I have unexpectedly lost a job, resigned from another because I did not agree with my contract terms and even left a well-paying job when I knew it was time to move on. I was in the midst of pursuing my entrepreneurial dreams when the pandemic hit. During all these times, my savings have been a life saver.
How to do it
First, decide on the percentage of your salary you can save each month. You can start with just 1% if that internship money is too tight to stretch. Remember, this is not for retirement or attaining assets, but for your livelihood. The point is learning to pay yourself first before meeting any other obligation. So, the minute your salary hits your account, transfer money into a savings account. Even better, make it an automatic debit order.
Then you need to continue learning. There are numerous personal finance experts on the internet, and many teach about the importance of saving emergency funds and other financial hacks to help you create a life of financial freedom. After all, the point of paying yourself first is to help you start living a life dictated by you and not by who is willing to pay you a salary.
Although I was fortunate enough to have been taught to save from a young age, I still wish someone had called me aside to tell me that the one person I can always rely on to pay me is myself. I’m letting you know so you can start making decisions with your paycheck that will allow you to do just that.
A timeless lesson that many don’t consider till later in life.
Also, by chance could you offer some ideas or advice on building passive income sources for diversification and to ensure income even when one is not working.