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How to Start Saving to Build Your Finances

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Written by   180
2 months ago

You need to save for emergencies. When Covid happened, I lost my job. However, even though I did not have any income for 4 months, I was able to pay my bills because I had savings. I have built an online business. If I had not saved money, I could never invest in a business. I have invested in the stock market and bought equity and assets. If I did not have savings, I would not be able to invest in the stock market or purchase equity and assets. Therefore, saving is very essential for financial security and financial freedom.

In order to save money, you should start cutting your expenses. Without cutting your expenses, it is really difficult to save money. You need to identify unnecessary expenses and cut all unnecessary expenses. You also need to avoid buying liabilities or getting into debt.

Why You Need to Save Money Regularly

Saving regularly means every time you receive payment, you save 20 percent of your income (or any amount you can). For example, you save every time you receive a paycheck or payment from clients. Saving regularly means you save, every week or every month. If you are unable to save because of your limited income, you need to cut your expenses so that you can start saving. There are a lot of benefits to saving regularly. First and foremost, you will be able to build sizeable funds. Apart from saving regularly, you need to keep your saving in a saving account so that you earn interest. For example, if you save $10 per month, you will have $120 in one year and $1200 in one year, now add interest to that principle amount. When you have savings you can invest in a business or stocks, or even real estate, so that you earn profits.

Every time you receive payment, you need to save 20 percent of your income. After some time, you need to invest some of your savings and keep the remaining savings in high-yield saving accounts like fixed deposit bank accounts. you need to save regularly, every week or every month. if you cannot save regularly another easy method is to save money by buying a term life insurance policy. By paying the policy regularly for 20-25 years you will have a lot of money when the policy matures. You can save only when you cut your expenses, without cutting your expenses, you can't save.

Saving pennies, or even bucks can be beneficial only when you make it a regular habit and never use the savings but instead regularly deposit in a bank account after your pennies and bucks have accumulated. The best way to start saving your change money is by putting it inside a piggy bank. Let's say you go to a grocery, tender a $100 bill and then receive 1 dollar and a few cents as change. You can then keep this money in your piggy bank. If you do this every time you receive change money, in a few months you will have a good amount.

Save Money to Invest Money

Saving has various purposes, such as saving for emergencies, saving to buy assets, saving for big purchases, saving for retirement, saving for starting a business, saving to invest, etc. It does not matter why you are saving, what actually matters is you are saving regularly. You need to save regularly, however, you also need to use your savings to make additional income, and you can do this by investing your savings.

I save to invest.

How do I do it?

Let’s say I withdraw $100 from Upwork, save $20 in my bank and use the remaining $80 to pay my bills. Let’s say a week later I receive $200 from Adsense, save $40, and use the remaining amount to pay my loan. Now, I have $60. This is a small amount to invest in the stock market. Therefore I'll have to keep on working and earn more money in order to save $100 or more. Once my savings accumulate to $100, I buy stocks.

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Written by   180
2 months ago
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