Since the last economic crisis in 2008, people did not talk much about personal finance as they were considered irrelevant. Thankfully, today, the situation is a lot different. In today’s world, people have two broader options when it comes to money. They can either spend it on a fancy new car, that new TV you have always wanted or perhaps a new laptop. They can also invest it or save it. When it to comes personal finance and personal finance activities, we’ll talk about investing and saving money.
2. Different personal finance activities
Saving money can help you achieve any financial goal. Maybe you want a comfortable retirement, a down payment for your new house or a new car, you can get there by saving money aside.
When it comes to money, don’t do any delays, the time is now. And with a little forethought and effort, saving money is not actually hard, it’s rather easy.
Saving money is a very important personal finance activity and therefore, it should be your priority. So, without a further ado, step one is to make saving a priority.
On the other hand, we have the option to invest money. It is a similar personal finance activity to saving, but much more profitable, if you are doing it wisely, of course.
3. Make saving a priority
You’ll be more likely to save money if you make it your priority. You should take a deep breath, sit down and figure out what to save money for – new car, house, TV, retirement, etc.
- Set a timeline for when you’d like to reach your goal.
- Your goal should be achievable, relevant and measurable.
- When it comes to the money, be vigilant by treating your savings contribution just like any other expenses.
4. Find where to save money
While it may seem rather difficult to find where to save, the chances are that you have extra money you didn’t even know about. You can find it by:
- Keep track of everything you did for a week or so. You might be surprised what you are spending money on.
- Make purchases with cash as it helps you to stick to your budget and avoid impulsive purchases.
- Lower your bills. Yes, it’s possible, also this one is a no-brainer.
- Pack your lunch or cook more at home. Eating out at restaurants can get pretty expensive.
5. Make money work for you
This is a different and riskier kind of personal finance activity. We’re talking about investing your money. Actually, I’ve already covered this topic in the other article, you can read about it here. Some general information when it comes to investing your money is that it is risky, but so it the reward.
The first thing you should is read about compounding, as that is one of the basic things when it comes to reinvesting the money.
You should also know that every investor has his/her own strategy when it comes to investing.
6. You come first
Up until now, you have probably paid everyone else first – whether it’s your landlord, your friend or the electric company. It’s vital to start paying yourself by saving some money. Once you’ve made a contribution to yourself and to your better self, you can divide the of the money to cover other expenses.
Moreover, most banks make this easier by transferring your funds from your checking account to your savings account, money market or any other account you had in mind.
To sum it all up, stop spending money on things you don’t need. Lots of people are impulsively shopping for things they will never use. By doing this, you will most likely never save any money and end up being in debt.
You have lots of options and explore them. You can invest it (high risk/high reward) or you can put money into a savings account where the interest rate is smaller, but your future is much more secure.
These are two of the most important personal finance activities, so when it comes to money, play smart.