What are the Importance of Savings and Investments
What are the Importance of Savings and Investments? Good question from lots of people specifically they are new to personal finance and investing.
So, “why should you save and invest money?”
A best answer to this question is, to face Life uncertainties and other financial financial goals. A clear visualization about your future and income is a solid motivational factor so save and invests money.
People cannot avoid the uncertainties in their life. One must be prepared always to face such situations especially those linked directly to finance. For example, an immediate job loss due to any reason would put the person in deep financial trouble and related pressures!
However those have saved enough to meet emergency, would not affected with such uncertainties.
Here is the tips to save or invest money
Have your financial goals or saving milestones
Set various financial goals to achieve after a particular duration. It can be creation of an emergency fund or buying a home etc. That is the goal. Identify the possible ways to achieve that goal. It can be saving, investing or creating additional income. You have a goal in your mind to motivate you to save or invest.
Track the progress
How you are doing with the identified methods to achieve goal. Achieve your investments and saving to confirm it is moving in a better way to achieve the goal in the future. This will help you to re-set the investment or saving priorities.
Re-evaluate your goals
If you are not motivated with the goals, it is the time to re-evaluate the goals. Of course there are possibilities to change goals in the future due to various factors affecting to the life of a person. It is fine. If you find your goal is not motivating you much as you wish, recreate it. You may need to switch this with another goals!
Read the list of common goals
- To see how wealth growing with compounding power
- Child education and marriage
- Decent lifestyle in the community
- Emergency fund
- Get out of debt
- Create multiple income streams
- Buying a home or property
- Starting a business
- Retirement with steady income
- Holiday trip including visiting holy places
Ensure to set a percentage of money aside for your own pleasure hobbies instead of saving entire money. People should enjoy them self too, to have a good lifestyle!
Unknown secrets about saving and investing
People, especially from middle class, might have faced financial issues and may think the same should not happen to their family members, get motivated to generate wealth for the successful life of them and family.
Money cannot buy happiness but it can buy financial freedom from troubles. Achieving financial freedom help a person to stand in their foot without depending anyone. It is especially applicable for the retired people, who need money to lead life but not have any income stream.
There are people, would like to see how money grows with compounding effect. They are generally focused on charity activities. Great investors and billionaires are the best example for the same. They still have simple life but like to see the money grow and active in charity activities. Bill Gates and Warren Buffets are two best examples in today’s world.
Things to do motivate self to save and invest
- Read personal finance blogs and sites
- Watch movies that give motivations
- Read good motivational books
- Have a group of people with similar mindset
Summary
Life goals motivates people to save and invest money. If there is no goal, no saving and investing required. If you still have not identified the life goals, it is the perfect time to do so. Once you have a perfect goal and start work towards achieving the goal, you will automatically get motivated to save and invest money!
More over that, disciplined financial life gives great lessons to others such as growing children, family members and friends to follow the path.
Remember, I have heard people saying “money is not everything“. They are actually lying with that statement! Yes, money matters to lead decent lifestyle with financial freedom and that is your biggest responsibility.
Everyone must understand the importance of money. It may not everything, but can give you many things!