For those unaware of the term, a nest egg refers to a large sum of money that is compiled over a period of time to achieve certain goals.

These financial goals most commonly include planning for retirement, owning a home or saving up for children’s higher education fees.

However, nest eggs can also be used as a rainy day fund in times of emergencies, for example, if you are struggling to generate enough money to pay for a sudden expense.

With the news painting a gloomy picture of the coming few months, you may be wishing you’d built a nest egg already. However, it’s worth remembering that whether its months or even a year or more - things will get better again, and that is the time to start thinking about improving your financial situation.

Not only do financial nest eggs help you achieve your financial goals but they can also serve as a support system in trying times, just like our More Than Your Score Loans.

Therefore, building a nest egg should be thought of as an essential practice that everyone should work on.

This brings us to our next question,

 “How do I build a nest egg?”

Well, by the end of this article, you’ll have all the answers, so let’s dive in.

#1. Setting a Goal

Before anything else, the first thing you need to establish is the goal that you want to accomplish with your nest egg. This goal can be money for emergencies, retirement planning or any other considerable expense that you wish to save for.

Furthermore, you also need to ensure that the goals are rational and SMART!

A SMART goal is a commonly followed principle that abbreviates to—Specific, Measurable, Achievable, Relevant and Time-Bound.

Once your goals check all of the above-mentioned criteria, you can begin the next stage of building your nest egg.

#2. Have a Plan

Now that you’re determined that you want to save money, you need to have a plan for how you want to do that!

Building a financial nest egg takes time. Therefore, you should create a time-bound strategy that will help you achieve your goals within a specific time frame.

The most commonly used strategy is to simply reduce expenses and save a certain amount of money every day, week or month. Again, whilst this goal may seem far fetched at the moment, once things start to get better, you may want to spend time preparing.

#3. Create a Budget and Follow It

The next step is to make a budget for your living expenses and ensure that you stick to them wherever possible. In this case, we’re not necessarily asking you to live below your means. 

The idea is to avoid overspending habits and manage your finances more efficiently. With the right budgeting tips, you can maintain your standard of living while also saving up money for your nest egg - whether that be for retirement, a holiday or something else.

All you need to do is calculate your income, reduce your expenses and deposit the balance in your savings account.

#4. Save First, Spend Later and Make It a Habit

This is crucial because many people think about saving after spending. In most cases, this leads to lots of spending and no savings at all.

To truly attain your goals within a set time frame, you need to practice great financial discipline and strictly follow your budget.

As soon as your monthly income is deposited into your account, the first thing you should do is transfer a set amount into your savings account. Only then should you continue to spend. 

This habit will not only help you achieve your current financial goals but it will also greatly help with building your nest egg—whether that is for your retirement planning or an emergency fund.

#5. Make Your Nest Egg Untouchable

Your nest egg needs to be absolutely untouchable and this is very, very important. Of course, during emergencies where you urgently need money, it’s understandable to dip into it but this should not be a regular habit.

If you have your nest egg in an account where you can easily spend it, you might end up using it unintentionally. 

Therefore, by putting your money in a low-risk investment or an inaccessible savings account, you can ensure that you will achieve your goal.

Choose Salad Money for Fair, Low Credit Personal Loans

By following these simple steps on how to build a nest egg, you can achieve your financial goals and successfully plan your retirement.

However, if you ever find yourself in a position where you need some urgent money, rest assured that Salad Money is always here for you.

With our fair, low-credit personal loans, you can get the financial support you need without having to worry about your credit score.

Our More Than Your Score Loans are specially designed to provide working individuals with fair personal loans in their times of need.

For more tips on managing your money, to read our blogs or to enquire about our fair loans, contact us now!