The first step is to face the future squarely and define the challenge: decide what your goal is first and then make a plan.Your goal will not happen just because you defined it.But neither will an investment plan work, if you have no goal to begin with.So, take the time to plan your goals.Dream a dream, if you want to.But do it.Now. Sticking a wad of cash under your mattress may sound like solid advice your great-grandmother gave you, but unless you're getting a healthy return on your investment, it's a poor personal financial choice. One of the oldest rules of personal finance is the simple admonition to pay yourself first. All the money books tell you to do it. All the personal finance blogs say it, too. Even your parents have given you the same advice.
Should you save money for a rainy day? Yes! But instead of hiding it in your home (or even sticking it in a bank account without some deeper analysis of the interest rates), you're doing yourself a disservice and turning down money that is rightfully yours! To pay yourself first means simply this: Before you pay your bills, before you buy groceries, before you do anything else, set aside a portion of your income to save. Put the money into your 401(k), your Roth IRA, or your savings account. The first bill you pay each month should be to yourself. This habit, developed early, can help you build tremendous wealth. If you’re just getting started in the Real World, saving may seem impossible. You have rent, a car payment, groceries, and maybe student loans. Sure, you’d like to save, but there’s just no money left at the end of the month. And that’s the problem: Most people save what’s left over — left over after bills and after discretionary spending.But if you don’t develop the saving habit now, there are always going to be reasons to delay: you need dental work, you want to go to Mexico with your friends, you aren’t making enough to pay your bills. Start saving now instead of waiting until next year (or the year after)