Why You Should Save and Invest Your Money
Are you saving some part of your income now?
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.
Where do you keep your savings?
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.
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.
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.
- 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.
What investments are you planning to make?
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