Want to start saving and investing but don’t know where to start? It can be hard to know how to put money aside and then once you do have a substantial amount to invest, how to proceed. Here, we outline some important tips to help get you started:
Get out of debt
First things first – if you have credit card debit or other things you need to pay off, these come first. You can’t save money if you are wasting money on interest incurred by your credit card each month. Tear up your credit cards and pay them off. Then the saving can begin.
Create a budget
Saving a little each pay day should be a part of your weekly budget. If money is tight, looking at ways you can save money by drawing up a new budget can help. Make a list of all of your outgoings including your home insurance, car insurance, power bills, groceries and the amount you spend each week on entertainment. Identify places where you are spending money that isn’t necessary, and create an account purely for your savings.
TIP: Make this account so that you can’t access funds instantly. For example, sign up for an online account where you need to transfer any money you want to spend from that account to another one if you want to withdraw. This will stop you from spending irrationally.
Building up enough savings
So once you start up an account, and begin putting money aside, it’s really important not to touch it, so that it can grow into a substantial amount that you can use for investing.
How to know where to invest
It can be difficult to know where to invest your money. This is where the advice of a financial advisor can really come in handy. There are several options available to you, stocks and property being the two most obvious choices. Ultimately, it depends on how much you can invest, when you are hoping to see results, and other personal factors that go in to determining which form of investment is right for you.
Spreading your risk
One important thing to remember is when you are growing your wealth, it’s important to spread it over several investments. Putting all of your eggs in one basket can be risky. It’s also important to always have an emergency fund with cash you can withdraw from quickly if you ever need to.
Saving and investing doesn’t happen overnight. It takes time to save up a substantial amount of money to be able to invest, and some research and advice to know what the best forms of investment are for you. But if you follow the above tips, and get into some healthy saving habits you should find that you’ll have a decent savings fund in no time, with the chance to grow it even bigger through smart investment choices.