How to Start Saving Money
Financial literacy is very important. If you read the biography of Warren Buffet, you will understand how he managed to become so rich. Buffet was already earning more than his teachers when he was still in school. Buffet managed to build his fortune by working hard, saving money, and then investing money. You need to be financial literate, you also need financial management skills. Financial management skills mean, knowing how to best use the money, knowing when to spend your money, knowing when to save money, and knowing when to invest money. In other finance, literacy means you know how to. Manage your income and expenses. You can grow rich only when you can handle money well.
Investment Vs Saving: Which is a Better Option
Investment means you take a financial risk by putting money on something and all the while expect higher profits. Saving money means you keep your money in banks where you earn interest and avoid any financial risk.
Between Investment and saving, which is a better option?
The answer depends on where you invest and how you save.
Gold is the most secured form of investment. Gold might not make you very rich, but it will give you good returns. That's for sure. However, in order to invest and profit from gold, you should not buy gold jewelry, instead, you need to buy gold biscuits or gold bars. Making jewelry from gold for investment purposes will actually damage gold and its value will be lower. Gold is one of the best investments because you can liquidate gold and convert it into cash anytime you want. If you have the purchase bills selling gold is very easy.
What to do if You Cannot Save Regularly
I have never been in a situation where I had to feel miserable because I do not have money. When I was a kid, I did not need money, my parents paid for everything. Even when I was a student, my parents managed my expenses. When I started working, I started saving. When I lost my job, I had enough money to run my life even when I did not earn any pennies for months. Before I was in a situation where I was at a point of having no money, I started generating income.
You can save only when you earn more than why you require for your monthly bills. If you are earning well, and still you cannot save then this has to do with mindset. The best way to start saving is to save 10 percent of what you receive and use the remaining 90 percent for your personal needs.
Buying Life Insurance When You Can’t Save Regularly
Even though the primary purpose of insurance is to get financial coverage when something bad happens, insurance can also be used as an investment or saving as you can benefit from the insurance policy in many ways. When you buy a life insurance policy, you can use the policy money upon maturity to support your family.
If you do not have a regular income, you can do nothing in terms of building your saving, investing, or even buying an insurance policy. Using an insurance policy as a saving scheme is only for those who have a regular income but cannot save regularly due to some unseen circumstances.
Insurance is required for financial risk management, emergency funds are for recovering from any financial setback or spending on any emergency requirement, and investment is the money you have put on any company or a business. If you have invested, or if you have a business, you need insurance and also emergency funds.
How to Avoid Using Your Saving?
You end up using your saving because your monthly budget is not enough to maintain your life. There are two reasons for this, one, your monthly budget is very small, two your expenses are very high. When you want to save money despite the fact that you are not earning well, your monthly budget will be very small. But no matter what you need money to maintain your life, therefore, you end up using your savings. The only solution to this is either to start earning more and have a higher monthly budget or try to fit in your monthly budget by cutting expenses.
First published on Trendri, in author's name
