Savings or investment - Part 1
Both are said to be ways at which derived income are spent by a worker it could be received in form of wages or salaries and the employee would decide which method he feels to use his income earned either by saving for the later future or to cover unforeseen circumstances or to invest in business or greater business that would seem as a medium to help generate more income
Savings
It is said to be the left over of money a person has after their consumer spendings has been subtracted from their disposable income for a particular period of time. Savings are said to be kept in form of cash or kept at bank as cash deposit which is not exposed to risk but to help get minimal returns gradually.
It could be said to be the amount that remains after spending and other needs have been deducted from the earnings. The savings stands for money that are idle and not being spent people save for different reasons in particular which maybe for future goals or plans like retirement, for children education for car or a house.
Steps involved in controlling ways of spending
To take inventory is individual financial assets: to do this, you need to develop a balance sheet for yourself. Remember, a balance sheet starts with the basic accounting equations: asset = liabilities +owners equity.
You can develop your own balance sheet by listing your assets on one side and liabilities which might be mortgages, credit card debt and auto loan on the other side asset include anything you own.
Keep track of all your expenses: you may often find urself running out of cash .
In such circumstances the o ku way to trace where the money is going is to keep track of every amount you spent.
Keeping record of your expenses can be rather tedious but necessary if you want discipline.
Prepare your budget: once you know your financial situation and your sources of revenue and expenses, you’re prepared to make personal budget l.
Remember budgets are financial plans. Items that are important in an household they include mortgage or rent ,utilities ,food ,life assurance, car insurance and medical care.
Paying off your debts: the first things to do with money remaining after you pay your monthly bills is to pay off your debts.
You should Start paying from the debts that carry the highest interest rates. Credit card debt, for example it may be costing you 16% or more in a year. Merely paying off such debts will set you on a path towards financial freedom.
It is better to pay off a debt that costs 16% than to put the money in a bank account that earns maybe 3% only.
Start a saving plan: it is important to save each month in a separate account for large purchases you’re likely to make.
Then, when it comes time to make that purchase, you’ll have the cash so you won’t have to pay finance charges. The best way to save money is to pay you first.
That is take your paycheck, take out money for savings, and then plan what to do the with rest.
You could even make plans with your bank or mutual fund to deduct a certain amount every month.
You will be unexpectedly surprised when the money starts accumulating and earning interest over time.
Borrow money only to buy asset that hav the potential to increase demon value: try not to borrow money for ordinary expenses.
You would get into more debt that way. If you have budgeted for emergencies, such as car repairs and health care costs, you should be able to say financially secure.
Only the Most unexpected,unforeseen expenses should cause you to borrow.
Paying off your debts: the first things to do with money remaining after you pay your monthly bills is to pay off your debts.
You should Start paying from the debts that carry the highest interest rates.
Credit card debt, for example it may be costing you 16% or more in a year. Merely paying off such debts will set you on a path towards financial freedom. It is better to pay off a debt that costs 16% than to put the money in a bank account that earns maybe 3% only.
Start a saving plan: it is important to save each month in a separate account for large purchases you’re likely to make. Then, when it comes time to make that purchase, you’ll have the cash so you won’t have to pay finance charges. The best way to save money is to pay you first. That is take your paycheck, take out money for savings, and then plan what to do the with rest.
Borrow money only to buy asset that hav the potential to increase demon value: try not to borrow money for ordinary expenses. You would get into more debt that way. If you have budgeted for emergencies, such as car repairs and health care costs, you should be able to say financially secure. Only the Most unexpected,unforeseen expenses should cause you to borrow.
Thank you for stopping by to read my article.
If you actually like what you see😃😄😉,watch📷📺📸 and read📖📋 I would equally be grateful for an upvote♥️⚡ a very cool comment under my comment box or a reblog 🌀😏 for everyone to see ... and perhaps maybe you would like to follow me for more of my Post to show on your own feeds. Don't miss any of my Post.🔝. Special thanks to all who put big smiles on my face with Auto Upvote for always being supportive to me 💞💯.