The children of the wealthier ones have more resources at their disposal and hence end up studying in the best universities while for those of the less successful lot; such education remains an elusive dream. The main reason for the difference in destinies is that some individuals never take the first step towards building a firm financial foundation – saving. An individual who does not save is bound to have numerous financial difficulties in future. Just like the person who spends more than he/she earns (courtesy of credit cards or loans) is bound to end up in a major financial crisis.

Given that saving is necessary from both the personal and national economic perspective, why then do many individuals consider it an exercise in futility? Has the concept of saving money has become irrelevant? Why are people so discouraged? There are many reasons and they have to do with the frustrated perception of the saving process.

How many people can deny themselves the pleasure of using a substantial part of their income? How many can do it for a reason other than to buy an electronic gadget or a gift for a loved one? Very few, reason? Many individuals have unnecessarily high standards of living influenced by a need to fit into a certain social class, usually influenced by friends and society. What these people seem to forget is that good things come to those who wait.

Saving requires a substantial amount of sacrifice; it might not be easy to deny oneself the pleasurable things in life. But it is a sure way of ensuring a sound financial future free of debt and full of joy.

How is an individual expected to cope with daily living expenses and also make sure that the future is secure by saving? The prices of goods and services are always increasing, despite the fact that income might have stagnated. This compounded by the fact that many jobs are not secure and disaster often strikes at the worst possible moment – like falling sick and numerous other unexpected expenses. You should keep in mind that individual’s productive years are exhaustible and retirement will sooner or latter come knocking at the door.

To get some motivation to save, think of the various things you can do with your savings. Articles in magazines are full of praises on stock market initial public offers and have numerous success stories to back their allegations. Others say unit trusts are the way to go, while some talk of insurance products. There are those who will favor bank fixed deposit accounts, treasury bills, treasury bonds, corporate bonds and so on. To other individuals, buying land and subdividing it is the silver bullet that can solve your financial problems, yet others will talk of ‘solid’ investment schemes that multiply your monthly input faster than you can say “pyramid” or “ponzi”. The entrepreneurs will always swear that they would rather invest in business, where they can make a killing, not to mention those who abide by rental real estate.

All this probably leaves you confused. You need to have some form of motivation towards saving. Come up with investment or business ideas and consult professionals in the field to unsure that your objective is ideal. Do not save for something you have no faith in.

To summarize the root to your financial independence come up with a personal financial plan, a systematic process of managing your financial resources so that you utilize them in moderation so as to leave some for future investment.

Determination of current financial position
If you don’t know where you are, you cannot plan how to get to where you want to go. Ones financial position is best clarified by calculating their net worth. Net worth is the difference between ones assets and liabilities.

Setting of financia