Earnings and savings are two important monetary needs of a human being. However,the majority of the times, people tend to lose their balance between savings and spending. One of the main reasons for this is that people do not know how to save and the various tips and tricks to save money. Saving money can not only protect you in the financial crisis but will also assure you a secure future and help you make investments which will give you good returns over a period. Here are a few modern ways to save money which you can implement easily.
Paying cash wisely:
See to it that unless you have a jaw-dropping offer on your credit card, you pay in cash. Paying cash these days is counted as something old fashion but if being old fashioned means saving money then why not? Often people become prey to the highly customized and attractive credit card offers and discounts,but at the month end, you are left with high-interest charges to be paid. Hence it is advice able to use cash whenever possible.
Making use of modern wallet applications:
Today’s world is completely technology-based, and so is the payment means. There are various applications today which give you a good amount of cash back in your account whenever you pay through these applications. Also, several times you even get 50% cash back on such apps which is really a good offer. You can save this money for future spending.
Saving from salary/business income:
If you are a salaried person then ideally it is said to maintain at least 20%-30% of your total salary. It is a human tendency to spend whatever is in the account by the month end and then wait for the next salary to credit. This habit needs to be changed,and if not, it will lead to a financial crisis someday. In the case of business income, you should be more careful as business is prone to uncertainties and may put you into heavy losses any time and you should always be financially ready to manage it.
Have a passive source of income:
Even millionaires are not satisfied with the money they earn so don’t blame yourself for not earning as per your expectations! One solution for this can be having a source of passive income. For this it is not necessary to have own asset; you can earn passive income from various creative skills, blogging, share renting,etc. Passive income may not add much to your pocket,but in tuff situations where your primary income is in danger, you can always rely on your passive income to fulfill your basic financial requirements.
Savings can be increased or even doubled up through investments. You do not need to have a huge amount for the investment you can initially start by saving a small amount and adding more to it slowly and steadily. As a new investor, you need to keep certain things in mind.
If you are a new investor and are thinking of making the moderately high investment,they have good research done before you invest in anything. Choose for investments which will give you returns in the long run. You can do this research on your own or take guidance of your mentors or financial advisors too. There are many online websites which provide you good guidance on where to invest and how much to invest.
Start in small quantity:
As a new investor, it is advisable to start making small investments. Initially investing too much without any experience may land you into serious financial trouble in case the investment fails. Once you understand the market trends and become used to it, then you can think of huge investments.
Invest in authorized companies/shares only:
Before choosing which company /shares or mutual funds to invest in do check the company’s reviews and ratings. Many fraud companies are coming up in the market which promises huge returns in small tenure.
Things to keep in mind before investing
Analyze your budget:
Before you invest to analyze your budget thoroughly. See to it that none of your expenditures or savings is affected due to your investment and then take the necessary steps ahead. Making huge investments may affect both your savings and investment; it will give you a good return but the return on investments take time and managing on a tight budget may get difficult for you.
Calculate your level of risk-taking:
The market is always prone to ups and downs,and there are chances that you may face loss or get very fewer returns on your investment. Be sure about the scale at which you are taking a risk as no investment can guarantee you a fixed amount of returns.
Have an emergency backup:
Having an emergency backup does not mean your savings! This back up is funds which you can keep as a safety in case you face loss in your investment or do not get expected returns then your finance won’t be affected due to it.
Diversify your investments:
In if you are investing in blue-chip companies, then also, do not invest everything just into one stock or mutual funds. Try making small investments in all sources so that if one investment fails, the other can recover the loss.
Always invest as per long-term planning:
There are investments which may give you returns in small tenure but if you want to enjoy huge returns always invest in plans which offer long-term returns. Short-term returns won’t be quite good, and you may even end up spending it easily. Also, the risk factor in long-term plans is comparatively lower than one in the short term. You can get in touch with PersonalFinanceAnalyst to get proper guidance.
There are several things to be researched and thought upon before investing in the market. Only having a good amount of savings is not enough; you need to make wise investment decisions to make the best out of your savings.