Once we have chosen our #imapGoal and know how much money we need to get it, it's time we think about our preparation to face the journey looking at the money that we have already saved and our capacity to save money.
Before starting this journey it’s wise to build a safety net to prepare and protect ourselves for the chances of unexpected events as for example losing our job or a severe illnes, allowing us to make decisions without the need or obligation to make them. The safety net is usually measured by the number of months that your savings (including cash and deposits) can cover all your expenses without having any income, and the best number of months depends on your personal circumstances and your context, but generally is advised to cover from 3 months up to 1 year of expenses.
Another important variable that will help us to measure our financial strength is the savings power, that is our capacity to keep money after having deducted all our expenses. When calculating it we need to have into account the likelihood that the sources of income change and also our capacity to reduce the expenses. For the #imapGoal this will give us a measure of how much we can top up every year for our goal.
Finally, before starting a journey to achieve a financial goal, is good that we have as much money as possible, so we will be able to take advantage of the power of compounding interests earlier. We call this our piggy bank. To calculate it, we need to look at the money that we have saved (including cash and deposits) after having deducted our safety net.
With all this information in your hand, you will know better yourself and you will become more confident to start your journey.
#imap uses this information to control the risks and to track the progress of our goal. If you don´t have yet the app, you can check all its features here.
You can now check how to choose an avatar that will represent your character linked to your goal and to your profile.
Comments