Saving is something that is spoken about a lot in the personal finance world. And there are many tips given, but which ones actually work? That is why we have compiled a complete guide on savings to give you the best personal finance tips possible to help you save money and grow your wealth.
Starting to save
So, the first question most people need to ask themselves is why am I saving? This could be for a rainy day, a house, a car, a wedding or even a dream vacation. It does not matter why you are saving, as long as you have a reason.
The next question that needs to be asked, is when do I need the money? As this will help you decide when and where to put your money.
3 Places to store your savings
There are so many places to put your savings that it can be hard to choose. That is why we always recommend speaking to a personal financial advisor to help you make that decision. They can give you great personal finance tips. But here are a few places to consider putting your savings:
A bank savings account
A bank savings account is a linked account that sometimes has a card on the account. This account earns a low level of interest but the money is instantly accessible. These accounts also have a low or no monthly fees and are available right from your bank. This makes them a very convenient and affordable option for most people.
The low level of interest earned is the only down side. But the ease if accessibility can make up for this.
A Call Account or Money Market Account
A call account is a type of bank account where money is invested to earn interest. Someone can access there money after a specified call window, often 24 hours, 7 days, 14 days or 30 days. But this can vary from bank to bank.
A Money Market is similar to a call account but often requires a larger investment. The money can be accessed daily and withdrawn between 24 hours to 3 days depending on the provider.
Both these investments are regarded as safe cash investments by most institutions. This makes them popularly used by people to store their emergency funds.
An investment account is a name for a number of types of accounts invested for the long term. This includes Unit Trusts, Cryptocurrency, Share investing & similar investments. These investments often are aimed at delivering returns over the 5+ year mark.
This is often used by people for retirement savings & used to grow your wealth. This is due to the fact that it can take some time and costs to get your money back.
5 Personal Finance Tips to help you save:
Know why you want to save
If you don’t know why you are saving, you will run out of steam and not reach your goal. So, sit down and work out why you want to save. As then there is a goal! Keep this goal in sight so you can keep reminding yourself.
“If you fail to plan, you plan to fail” – Benjamin Franklin
The biggest mistake I have made that has caused me to not reach my goals is to set too big of a target. Especially if you are starting from R0, start small. Like laughably small. Create the habit, and then increase it. This is a common tip in the personal finance world.
Know where you are going to keep the money
Do some research, speak to your advisor and know where you are going to put your money. Somewhere accessible enough to suit your goals. If you want a financial advisor check here! And if you don’t know learn by reading our blog!
We all like a reward for a job well done. And if you have been following this blog for a while you will see that this is something I am very for. If you work hard you deserve a reward! So, reward yourself with something small. Like a Bar One is my go-to!
If you are like me, and most other people, you will forget things. And when it comes to transferring money to your savings account, you will probably forget! So, setup automated transfers to ensure you save that money!