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Why You Should Save and Invest Your Money

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Jemuel is an electronics engineer, software engineer and author of articles about electronics, technology, personal development and finance.

Want to secure your future and your children's future as well? Start saving now and invest your money wisely. Read through this hub to know more how.

Want to secure your future and your children's future as well? Start saving now and invest your money wisely. Read through this hub to know more how.

Preparing for our financial future is the best way that we can do for now. It is the only way to make ourselves, including our families to be secured of a brighter life ahead.

The family should seek ways of saving a part of it for future use. Some people do not save money. They tend to spend all their money and live their future in misery, hunger, and poverty. Isn't it lamentable to become old and become a burden to your family? One good reason for saving is that there would be money to be used during the old age especially in cases of sickness, accident or for other unexpected circumstances. This is the time when one is not able to earn enough money for the expenses of the family.

Importance of Saving

Savings insures the family's future. It is wise to find ways and means to make the future secure for the family. These are the reasons:

1. It ensures the education of the family

Well-educated persons can find better jobs. Parents are looking for ways to give their children the best education. It is now common for parents to save or to get educational plans for their children while they are still young.

2. Protects the family against financial reverses

Accident, death, bankruptcy, unemployment, sickness and other unexpected misfortunes may come unexpectedly to a family. Such emergencies render a big blow to a family because income usually becomes less or it may be cut off. Savings may soften the painful effects of these occurrences and safeguard the family from such emergency until they can recover. It is highly recommended to have emergency funds at least equal to 6 times your monthly income. This is something that you can use in the midst of unexpected situations..

3. Savings assures security in old age

To avoid complete dependence upon other people for support during old age, it would be wise to save a part of the family income. An old person who has money is usually happier and has self-respect and is more welcome wherever he goes.

According to Maslow's Hierarchy of Needs, humans have levels of needs. One of which is the need for security and safety which involves the goal of financial stability.

According to Maslow's Hierarchy of Needs, humans have levels of needs. One of which is the need for security and safety which involves the goal of financial stability.

4. Savings assures the good health of the family members

When someone gets sick, it is better to be protected by a savings account or a health insurance. Sickness necessitates a doling out a larger amount of money that cannot be met by the monthly salary of a person. To be assured, many families set a certain amount each month intended for these emergencies.


The government is not in a position to take care of everyone who has no money or out of job so it is a good idea to save. Be accustomed to putting aside a certain amount each pay day. This amount should be deposited in a bank and could be withdrawn when needed. Money in the bank gives one a feeling of security and it enables him to give his family some luxuries that cannot be attained without savings.

On Investment

Savings should be invested in order to yield returns and to eventually increase the income of the family. It is unwise to place the money in piggy banks or somewhere else where money is stucked and eaten-off by inflation.

Investment is the use of money in business to earn more money or returns. Before doing so, be sure that the investments you will choose is a safe one or the business you are going into is financially solid. An investment is safe if money is placed in some forms of business where the principal is kept safe and a sure interest or profit is given back.

Isn't it nice to keep your money in a safer place? Talk to your banker now, and have a good conversation regarding your financial plans and goals.

Isn't it nice to keep your money in a safer place? Talk to your banker now, and have a good conversation regarding your financial plans and goals.

The following are some forms of safe investments you might want to consider:

  • Insurance. This is a very good form of saving for someone who has many persons depending upon him for support. A father must get an insurance so that his family will be taken cared of in time of his death. This takes the form of life, nonlife, accident, health, and education insurance


  • Real Estate Investments. Investments in lots and houses and other kinds of buildings are more permanent in character. The prices go up yearly. In apartments and houses for rent, a sure payment of rental fee is collected each month. Investing in lots and lands is unwise if there are disputes over the title or if the titles are fake.


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  • Investments in Bonds, Shares, and Stocks. Shares, and Stocks. Shares in business may be good investments but there are possibilities that the business may fail. Choose one that is managed by competent persons in order to profit from your investments.

Most people prefer to invest their money on stocks and bonds because the interest is greater than in other investments. For the average person, bonds are regarded safer than stocks. Stocks should not be bought unless one can afford to risk his money. This kind of investment should be made with the advice of experts.

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2013 Jemuel

Comments

Fortune Planners from Chennai on August 26, 2019:

Your hub best part is Maslow's Hierarchy of Needs this chart helps me lot to understand about financial planning.

Bill Holland from Olympia, WA on June 17, 2014:

Wise words from a young man. I wish I had heeded these words when I was younger.

Jemuel (author) from Cebu, Philippines on November 09, 2013:

@My Cook Book : Thank you so much for reading my hub. I hope this can help you in any way.

Jemuel (author) from Cebu, Philippines on November 09, 2013:

Thank you Larry! I agree with you, parents should also consider Roth IRA for their children. Parents must get retirement plan for their future and for their children's future as well. It is really good that the earnings are never taxed. Well, thank for your valuable input.

Jemuel (author) from Cebu, Philippines on November 09, 2013:

Thank you for your comment Denise. Yes, you are right, most people seem to value the importance of savings when they are in the later part of their lives. I think it is due to the fact that people are more interested in securing the present than the future, that is why we tend to liquidate our investments or money when we are young. Good thing that you have your savings Denise and have invested your money in retirement savings accounts. You are doing good.

Larry Wall on November 07, 2013:

A very good hub on an important topic. I would only suggest that parents start a Roth IRA for their children. This plan lets you deposit money which is taxed. However, the earnings are never taxed. Parents use to buy Saving Bonds, which are not a great investment. A Roth IRA or if you are older and need the tax advantage now, a traditional IRA can help supplement any pension, 401K or other plan. The Roth IRA came along too late for me.

Denise W Anderson from Bismarck, North Dakota on November 07, 2013:

Now that we are in the later part of our lives, we see the value of investing money into retirement accounts, savings accounts, and other safe investments. We wish we would have done more sooner, and not fallen prey to the temptation to liquidate these investments when we were having money problems early on in life.

Dil Vil from India on November 07, 2013:

Well written and well said hub, thank you for the same.

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