How to Start Saving to Build Your Net Worth

The best way to save money is by depositing money on your interest-bearing savings account. You will earn money just by depositing money into your account. Once your petty saving becomes huge you can deposit on a fixed deposit bank account where you can get better interest rates. If you want to take risks and multiply your savings, you can start investing in shares.

When I lost my job I used some of my savings to create an online business. Currently, I am earning just about what I need to pay the bills. But I save what I can

Can We Grow Rich By Saving?

Saving regularly can make you financially secure but saving alone does not contribute to your richness. In order to become rich, your money needs to grow, when you save, money does grow but the growth rate is very small. For instance, in an interest-bearing saving account, you can get just about 4-5 percent interest. You get better interest rates on fixed deposit accounts, perhaps 10-12 percent, but it is still lower than what you can profit by investing. You need to invest money so that it grows and you become rich. Investing is risky but it is the only way to become rich.

A lot of people believe that they have to first pay the bills buy everything they need and if they still have spare money, they can save that money. However, saving does not work in this way. You will have to first save some portion o your income and manage your expenses and bills with whatever is left

If you want to save money, you should save from your income and not from the money left on your hands after paying your bills. For example, if you receive a $1000 salary, you will have to save 5-10 percent of your total income, instead of paying your bills and buying necessary items and saving only when money is left.

What Makes Saving Difficult

When I had a job, I was saving money in emergency funds. When I lost my job I was able to use the emergency funds and managed to live comfortably for 4 months even without earning a penny. I was also able to use emergency funds when I had Covid.

When I had a job, I was earning regularly, I was also earning more than what I needed for paying my bills. I managed to save enough so that I could live comfortably even when I lost my job and did not have any income source for 4 months. I even had enough savings to start my own business and generate income. You need to save for the future.

Now, don’t have a fixed job, I freelance and my income is not always great, therefore, I am unable to save regularly.

Saving always depends on your income. If you earn more than what you need to pay bills you can always save a good amount. Whether you are living in a foreign country or your own country, you can save money only when your earnings are bigger than your expenses. Saving is difficult if the cost of living is high.

Saving Strategies That Work

You should start saving early on, you can try saving even when you are a student. Instead of buying new textbooks, buying old textbooks, or borrowing from the library, you will save a lot of money. Instead of living in a single room, try sharing your room with other students to save money on rent. Things like this will greatly help in saving money. Also, stop spending on junk foods.

Saving will be easier if you do not have liabilities. Paying for rents and other expenses are liabilities, which make saving really difficult. If your earnings are lower than your liabilities, you will have a negative balance. Therefore, you can save money only when earnings are better than your liabilities.

Vices like gambling, drinking, and smoking are not only the enemies of your financial health but also mental and physical health. Drinking and smoking will take a toll on your physical health, you will not only spend money on cigarettes and alcohol but also on medical bills. When you lose money in gambling, it will take a toll on your psychological and emotional health.

First published on Trendri, in author's name.