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The right way to approach savings and investments


When we think of savings, most of us think of it as something to do after we have taken care of our monthly needs such as paying rent, utility bills, buying groceries and other such requirements. The problem is more often than not, there is not much left over after spending for the essentials because of the growing inflation and the inability of our monthly earnings to keep up with said inflation.

This is an absolutely wrong way to approach savings, you need to think of savings as a necessity as well and set aside a portion of your monthly interest towards savings. From 10 to 15 percent of your monthly income is a practical and reasonable amount for monthly savings. You can even begin with less if you find that amount hard to save to begin with and work your way up to reach your target.

Then once you have put that money in savings, use the rest of your earnings to meet your expenses. If the reduced amount cramps your style, let it, because savings is absolutely mandatory if you wish to be financially secure in the future.

Invest to Boost Your Savings

Saving isn’t enough; you should make your savings work for you. So, once you have saved a good bit of money, you can start looking for investment options. As for me, the forex mql4 platform is a good option, and so is stocks, but if you haven’t a clue about how to go about investing in these markets, first take the time to research and do your homework. Once you have got a hang of it you can easily earn a steady stream of extra money from your invested capital.

Don’t Spend Beyond Your Means

No one is asking you to be a miser, but you have to know what is essential for your survival and what you can do without. Also people tend to change their spending habits once they get a raise; this is a really bad idea.  If you could do without the extra expenditure last month, you can do without it this month as well, it is better to put the extra money in savings instead. You will find that reducing your expenditure even by half percent can boost your savings annually by about 10% or more.

Set Your Savings Goals

Setting savings goals will help you decide on where to invest. If you have long term goals spanning over years, then bonds, certificate of deposits etc. are a good option, but if you are saving up for next year’s vacation or a wedding or something similar then you might have to opt for investment options with bigger returns as well as bigger risks.

 Invest Responsibly

Money begets money, but only if you are smart about investing it. In your haste to get big payoffs, you should not take undue risks. Only invest in stable companies that have a bright future, diversify your portfolio so that even if you get hit at one front, the rest of your asset can stabilize you.

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