How to Save for a Rainy Day From your Residual Income
In this fast pace of life unexpected things come up, which a person can’t afford to deal with on the spot. Savings is the demand of the day; it adds up over time. Residual income is that amount of income which an individual saves after fulfilling his day to day expenditure. It definitely enhances peace of mind, decreasing your stress, as you know that you are prepared for the unanticipated, that life will throw at you.
The amount left after subtracting the expenses and debts from the person’s take home pay is the residual money, which can later on be utilized for other expenses. Residual income is a very attractive way of earning money.
Passive Income
It is the second application of residual income. This is type of income is often incurred from one original activity. Whether it is the rental income from home, pensions, stocks, bonds, alimony, interest earned on the savings or can be hereditary or royalty. There is no connection of time involved in this mode of income. Once the original work is done, there is a particular amount of money which a person can earn for long, maybe till he is alive. It is achieved on regular basis, and less effort is required to maintain it.
Long term Investments and Savings
The programs in the forms of dividends and interest, are the best form of residual money which can be utilized during rainy days. You can also market or create your own products, as self publishing has several advantages. You can profit as long as the product is viable in the market. Join associate programs. At the beginning, it might be time consuming and harder to promote your product, but the income is more stable and rewards are also greater. So, the best type of residual income is that, where you have exclusive rights and full on control.
Track your Expenditure
Along with your savings. Determine your budget, save your receipts and see to it where you are overspending. Review your transactions, as it is easy to keep a check on your expenditure or overspending. Make sure you are saving enough to fulfill your aspirations, though the savings can be of different category each month. Make it a point to pay yourself first. That is, deposit a small amount in your savings, so that you don’t have tension at the end of the month about having sufficient money.
Residual income is a very important component to apply for a loan. You can get additional debt. The borrower can make the payments of loans each month, as he has sufficient funds and the lender will also not hesitate to offer funds.This way you can lean on the money saved as a cushion for you, to pull it out when in dire need.
So, insure to pay yourself first, rather than spending on other things. Paying yourself will help you to have money for emergencies and for a rainy day.
