Without a doubt, saving is a fundamental aspect of our
financial lives. If you want your earnings to go further, you first
need to save. However, saving by itself is a futile attempt to grow
your money; at some point, it becomes a choice between being stuck
midway through your goal, or taking the next step that is, making
investments.
Of course, the latter would mean taking risks, and not
all risks pay off in the end. That, however, is all part of it;
sometimes, you have to lose some to gain more.
In case you are not convinced why let us give you a few
reasons why just keeping all your money and savings in your bank
accounts is not exactly a great idea:
Let’s state the obvious: the money hoarded in your
piggy banks or bank accounts will not multiply by themselves. So
once you have saved enough, the next step should be investing. Of
course, not everyone makes the
right investment.
Not all of us is fortunate enough to make the wise
investment at first try; sometimes, it would take you a few failed
attempts. The point, however, is not to give up and to learn from
your failures to make better decisions next time.
Many fear the advice “make investments,” mainly because
it dealing with stocks is mostly associated with it. This, however,
is a common misconception; investments come in many forms, not just
in stocks.
Education is
one, and it is one that no one can take from you.
The properties you own and the different insurances you
pay for are also investments. Of course, you can also consider
mutual funds or start your own business.
Speaking of investments, the things you purchase are
also investments of some sort. Just how good of an investment they
are depends on their quality, durability, longevity, warranty, etc.
relative to their price.
That is why, when you go shopping, going for the
cheapest ones is not always a bright idea. Remember this when you
go shopping for things that are expensive in the first place such
as furniture and electronics.
We are not saying that expensive, high-end items are
always the best; we are simply saying that in some cases, the
cheapest are not always the best, reliable options.
Thanks to the Internet, comparing different
products/services from competing brands and reading reviews are
easier to do today.
Your savings might be safely kept in the banks and your
cookie jars, but they are not safe from the ever-changing value of
money. Currencies depreciate,
and the value of the money left uninvested go down with them.
Naturally, this also means less purchasing power.
Not to scare you from saving, but just imagine the
worst case scenario of the currency of your savings dropping
dramatically. Picture your $500 turning into $300; that is already
$200 worth of losses, almost half of the total. Saving alone does
not seem exactly stable and safe now, does it?
No one is encouraging you to splurge all your savings
and money on your every whim. However, treating yourself once in
awhile is not only good way to rest, unwind, and destress; giving
yourself a break from work, careful budgeting, and thrifty spending
can also offer experiences that will not only help you out
regarding motivation and psychological balance but your growth as
an individual.
Remember, life is not just composed of your job. You
also have to attend to the other aspects of it and to keep a
balance.
After all these, you might start thinking that you
should stop saving altogether. Do not get the wrong idea;
saving is important,
and we all need to do it especially at first. The point is that you
need to know when to stop saving and when to start investing.
To help you out, let this checklist remind you of the
things you should save for as well as some instances wherein you
will also need to do it.:
Everyone needs to have emergency funds, and many
financial advisors suggest having at least enough to live off it
for 6 months. Once you secure sufficient amount for at least,
that’s one thing to cross out your checklist. Do note that having
them is even more crucial in case you are about to be unemployed
and/or will not be working for a while.
How much you will need for emergency
savings would depend on your
circumstance. Singles would usually need less, and it so follows
that those with families will need a lot more, about the number of
family members (especially dependent members). If you are the head
of the family, or the main or sole provider, it’s another reason to
put emergency savings up your priority list.
Like emergency, this is also another important item on
this checklist. If you want to ensure a comfortable life for the
future you, then make this one of your priorities, especially while
you are young, at the height of your career, and/or earning
big.
TNS
