Surely you have heard too many recommendations about the importance of saving as one of the fundamental habits in managing personal finances. And it has set goals to allocate a percentage of its monthly income towards savings.
The exercise of saving is accumulating money. Then you are saving when you get resources in a savings account, under the mattress, or give your money to a family member or friend to have it returned at a particular time.
If you do not acquire a lot and can scarcely take care of your tabs, setting aside cash may appear ludicrous. When you have $5 left toward the month’s end, why even trouble to have a go at sparing? Since everybody needs to begin someplace, your budgetary circumstance will probably improve after some time if you work at it. Setting aside cash merits the exertion. It gives you true serenity and choices, and the more you spare, the simpler it becomes to collect extra investment funds.
Who has not lain alert at 3:00 a.m. considering how they planned to manage the cost of something they required? If cash is genuinely close, you may be thinking about how you will pay the lease one week from now. If you are somewhat further up the money-related stepping stool, you may stress over how long you could cover the tabs if you lost your employment. Further down the road, the cash considerations that keep you up around evening time may base on paying for your children to set off for college or having enough cash to resign.
The problem that only must save or accumulate resources is that they lose value over time. And this happens because the goods or services you acquire continuously increase in price: food, transportation, education, air tickets, and in general, all products or services are more expensive today than a year ago, for example.
As you amass reserve funds, your budgetary concerns should reduce insofar as you live inside your methods. The decreased worry from having cash in the bank opens your energy for more agreeable considerations and exercises. Finding the best investment account is critical to ensuring that the money you care for acquires you the most significant premium.
Hence, the importance of accumulating money and putting those savings to work. Invest your savings so that they grow over time and your capital does not lose value.
The Choro Lactam 360 study conducted in 2016 revealed that 36% of Colombians say they save. However, the measurement survey of financial capacities carried out by the Development Bank of Latin America (CAF) in 2015 indicated that 37% of Colombians save and put money under a mattress or in a piggy bank.
Another form of informal savings among Colombians is the so-called “chain.” This figure shows that a group of people periodically contribute the same amount of money a member of the “chain” receives each month.
For example, a person who participates in a chain contributes $100,000 monthly for one year. He will receive $ 1,200,000. This common practice among family and friends causes money to accumulate but not grow.
Saving is essential because it is the first step to start growing financially, but it is not enough if you do not put those savings to work. Remember that investment is the ideal complement to conservation, and there are different alternatives to, in addition to preserving the money you saved, it produces simultaneously.