More people are financially conscious; however, while many already know the importance of building wealth and planning for the future, saving money on a minimum wage could be a struggle. People who live from pay cheque to pay cheque might think that no amount of financial literacy can help them to save money, much less save for a pension. It may seem impossible to prepare for the future or pursue goals if the means to save is just not there in the first place.
Camille Steer, Senior Corporate Manager, Jamaica Money Market Brokers (JMMB) Fund Managers, points to hope for low-income earners. She says, while having a low income may be a factor that makes it more difficult to achieve financial goals, you should not lose hope. Even minimum wage earners can save money little by little. “No matter your income, it is important for you to have that general desire to plan for the future. Because to have something is more than nothing. So, no matter your income bracket, you need to plan for retirement,” Steer said. Steer continues, “It’s also important to know where your money is spent. List all spending to know the most significant expenses and track unnecessary purchases. Simple habits like buying food instead of cooking can take a considerable portion of one’s income, especially when done regularly. If unnecessary practices are eliminated, you can start your savings.
Design your financial journey
Saving requires focus and consistency. You have to focus because retirement planning is essential. Getting the information, whether it is from articles or videos, can help you to make more informed and effective decisions..“You have to own your financial journey. You cannot continue to live in a state-of-mind, of living from hand to mouth, and do not make the effort even to put aside $100. It is not necessarily the amount, but you must be consistent because consistency will get you there,” Steer added. Even though having a low income is an obstacle to saving, it is not impossible to overcome. There are opportunities to earn more. Freelancing is popular in fast-growing industries as well as online platforms that offer a wide range of jobs for qualified applicants. Another option is to start a small business that can provide an additional income source even when done right from home.
Skilled people can use their talents to get side jobs apart from their regular jobs. Skills such as hairdressing, barbering, and makeup application, plumbing, block laying, area few that can provide additional income. “There are many ways to earn additional income. One needs to make the most of his or her skills without getting in the way of a regular job. Create opportunities in terms of increasing your income and that can help. Each person has unique circumstances. So, you need to be mindful of that and tailor your expectations and your financial goals accordingly. Don’t limit yourself! The most important thing is to start,” Steer says.
Building a habit of saving consistently
Saving is a habit, built over time. They say it takes 21 days of consistently doing something for a habit to fully form. The challenge of saving presents itself to everyone with a goal in mind. Building the habit of saving requires perseverance, especially as you may not have a lot to work with, in terms of money. Debts can quickly eat into your savings. This includes borrowing randomly from friends, siblings, or other family members. Falling into debt when you are trying to save is counter-productive and may end up destroying all your saving momentum,” Steer said. Stick to a budget and avoid getting into debt. Prioritize what it is you need to survive. You can eventually have debt, but it should be money borrowed to put towards things like education, or a home of your own.
Once you have put away a certain amount, you start thinking about treating yourself to something. If you really want to build your savings, you should hold off on buying anything. Think about the bigger goal that you have, and let it be your motivation to hold off on splurging. Having healthy saving habits in place now while you are not earning as much can build good financial discipline that will serve you well for years to come. This can be the foundation on which you build bigger savings even when you land a job that pays better and is more fulfilling.
If you are already saving, whether for retirement or another goal, keep going! You know that saving is a rewarding habit. If you are not saving, it is time to get started. Steer encourages that you “Start small if you have to and try to increase the amount you save each month. The sooner you start saving, the more time your money has to grow. Make saving for retirement a priority. Devise a plan, stick to it, and set goals. It is never too early or too late to start saving.”
Jamaica Money Market Brokers (JMMB) is a member of the Pension Industry Association of Jamaica (PIAJ). Click HERE or the logo below to learn more about JMMB Retirement Solutions!