Learning how to save and making the right investments are part of living a life of financial security. While these words might be used interchangeably, they aren’t the same thing. It is important to understand the difference so that you can make the right financial choices that could impact your life dramatically. Principle Insolvency is here to explain the difference between saving and investing your money.
Saving Money
When someone is saving their money, they are usually setting aside a certain amount of money on a weekly or monthly basis in case they run into a financial emergency where funds are needed. This is usually done by putting this money into a bank account. Study after study shows that there are great benefits to saving your money. When people are putting money aside for a rainy day, they are far less likely to have anxiety about their finances. People that have figured out how to effectively save their money are also less likely to make poor financial decisions. Following are some tips to help you save money more effectively:
– Start Small: You should start by putting as much money aside as you can. Even if this is just a small portion of your income.
– Save First: As soon as you are paid, moving that money into your savings account can help keep you from feeling tempted to spend it.
– Make it a Habit: The more you save money, the more it will become a habit and simply part of what you do when you get paid.
– Different Banks: If you have a difficult time saving because it is easy to move money from one account to another, we recommend opening a savings account in a different bank.
Investing Money
If you interested in investing your money, that is an entirely different thing. Investing means that someone is putting a portion of their money into thinks like the stock market, funds or bonds to help that money grow. This is helpful when you are trying to save your money for financial success down the road. There is much more risk with investing because while it can gain in value, you can also lose money when you’re investing. Here are some tips to help ensure you’re investing wisely:
– Have Goals: You should have clear goals in mind when you’re investing your money. Know what you’re trying to achieve.
– How Long: Have an end goal. You want to know when you’re planning on using that money for your retirement.
– Balance: Find the right balance between risk and return for yourself.
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
If you’re concerned about your finances and are in trouble, you can turn to Principle Insolvency to help you find the right debt solution for your circumstances. Even if your debt seems like it is unmanageable, we can help you find the right solution. Call us today!