She is passionate about the financial management of people around her. She is all about self-growth and is open to constructive criticism.
The world is full of uncertainty and having no financial security is risky. A financial emergency could occur where you have to source money. This could be avoided if you have your savings. As they say, always save towards the rainy days. While saving, rainy days do not have to be the goal in mind. It could be anything you want to have. It could serve as a source of motivation for you.
Difference between Savings And Investment?
Savings is the setting aside of a sum of money for a return, usually in percentage. Savings should be primarily short-term and about three months to 2 years. You could be saving towards buying a new phone, laptop, having your wedding or any other thing. Savings have lower returns compared to investments depending on where you save.
While investment is setting aside a sum of money to work for you and getting a fixed return as profit., becauseof the invention of the digital age, investment is now so much easier. You could invest in Companies' stocks, invest in dollars, Cryptocurrency (as long as you have so much knowledge).
In savings, your money is idle while bringing in returns, while in investment, your money is working.
Reasons Why You Should Save
Saving is a habit. Habits are difficult to take up once you stop for a while. Savings demand a lot of sacrifice and dedication. Everyone has dreams and aspirations they are trying to achieve. I believe anyone should save/invest because:
- Emergency Fund
Some expenses cannot be foreseen. How do you offset such fees if you do not have extra cash saved somewhere? To avoid borrowing from friends and family, it's advisable to hold a small percentage of your salary or allowance. The earlier you save, the better it becomes for you because by then, you would have saved a lot of cash.
- Save for your future
You want to buy that course to learn that skill, have that wedding, get that house or get that new camera. These are reasons to save. You need to save for your future. To avoid getting a loan or working overnight to get that amount of money, you might as well start saving now.
Old age is imminent. Everyone knows that as you get older, the less you can work. Why not work for your money now and save for your retirement age. That way, you do not have to rely solely on your children and be a burden to them.
- Financial Security
When you save, you become financially secure because you are not living 'from hand to mouth.' Being financially secure means, you have something to fall back on when your source of income faces lax.
Save because you want to be financially secure.
- Maximize Interest Rate
The higher your savings, the higher the interest rate. So you could save because you want to get more money. Choose high-yield saving interest so your money would increase a little after saving.
- You want to attain Financial Freedom
You do not have to constantly worry about the lack of money and have the freedom to do what you have always wanted to do. When people don't have to worry about lack of money constantly, they can spend their time doing things they love.
You can also set different amounts for different priorities on your list.
Tips To Help You Save
- Start small
Most people feel they have to save a large amount of money before it could be considered a saving. That's not true. You could start small, like saving 10% of your salary after paying your debts. If you do not inculcate the habit of keeping when you earn little income, you most likely won't start when you start making so much more.
- When you save, treat it as a debt to yourself.
When you treat your savings as a debt, you have to service your debt constantly. In a situation where you break your savings, you have to pay back.
- Track your expenses
To save, you have to track your expenses. Know what you receive and what you spend to plan what you would save.
- Avoid unnecessary fees and expenses
Try to cut back on your expense and avoid unnecessary billing. This would go a long way in helping your financial status.
- Learn the habit of saving 'Extra cash.'
The extra cash could be in the form of monetary gifts or a support fund. Learn to keep those as they do not cost you anything to save.
- Getting a side hustle
Having just one source of income is not for everybody. While it is advisable to have more side income, it's not compulsory. Having a side hustle boost would boost your saving ability.
- Ensure you save with High-yield savings.
Putting these habits in your life gives you a sense of responsibility. So why don't you try it today