How To Start Saving And Investing Money For Beginners

Have you been ignorant about the processes involved in saving and investing money as a beginner.

Saving and investing is surely one of the fastest ways of growing money. Although growing your money by incorporating these acts may be slow, there is no doubt that you will enjoy maximum benefits in the long run.

However, it is important to have a sizable amount of knowledge about how to secure your finance to make informed decisions. 

Whether you have little or more money, the most important thing is to educate yourself on the opportunities involved in Saving and Investing, devising a plan on how to start, and taking action. 

In this article we will cover; 
The basics of saving and investing
The difference between saving and investment
10 ways to start saving and investing money for beginners

Basics of Saving and Investing

I am happy to inform you that there is no latecomer in the world of saving and investing. Just as we didn’t come to the world with the knowledge to know everything, saving and investing is also not automatic. People work towards saving and investing rightly to build wealth.

Although few people acquire wealth through family members or lottery, not everyone receives such luck. 

However, you can change the narrative and build financial security by saving and investing over some time. Research has also revealed that people who earn perceived modest incomes and dared to start their journey towards financial freedom can actualize their goals and enjoy the freedom that comes with it. 

To trigger your journey to financial freedom, here are the things to do;

  • Access your current financial situation – Take some time out of your schedule to critically access your financial state. If you have debts discouraging you from committing to financial freedom, get a note pad, list your assets (what you own) and liabilities (what you owe) in a separate sheet. Then work towards increasing your asset and reducing your liabilities. The more you reduce your liabilities, the more time
    you have to grow your finances.  
  • Make a financial plan – List the things you wish to save on and invest in. It might be savings towards education, home, a car, unemployment, retirement e.t.c. Then draw out a road-map towards your finances to actualize your goals. 
  • Be intentional about your savings plan – Take an inventory of all your expenses and make a deliberate move to cut down unnecessary ones to pave the way for more savings. When you keep track of your expenses, you will be able to pinpoint everyday spending and erase unnecessary ones. 
  • Start saving small – Think about putting two dollars aside every day. This amount can add up to $730 in a year. If you saved this amount for a year and put it in a 5% interest yield savings account or investment, it will turn to $912.5 in five years. If you can successfully practice this for a year, you will be motivated to try out bigger savings or investment in subsequent years. 

Let’s take a look at differences between saving and investment;

Saving: This refers to money kept in places where you can access it at any time. A good example is money kept in a savings account in a bank or an online saving platform. While there are varieties of reasons for saving, it is important to prioritize our savings for investments purposes. 

Investment: This refers to the money invested in a business, stocks, mutual funds, bonds, or real estate, which can be considered risky or less risky. Any of these monetary assets are usually purchased with the plan to sell them at a higher price, for a profit, in the future.

Most times, these types of investments have a great opportunity to earn you more money. Asides individual investment, an investment could also involve giving a company or enterprise your money with the hope of getting more money in return.

However, it is crucial to thoroughly research all your investment choices as a blind investment could cause you to lose a lot of money. 

10 Ways to Start Saving and Investing money for beginners.

1. Map out a strategy: Wait for a second, breathe in and out, clear your head, and swing to action. Get a note pad or open Microsoft word/excel on your laptop and start listing how to cut your expenses and start saving.

Saving will be effective if you stop despising that one dollar or stop buying everything that comes your way. You would be surprised that the one-dollar investment you looked down on today might be worth $10000 in the next 20 years.

Bitcoin was priced for few cents some years back. Now, a bitcoin is worth millions of dollars

2. Design your financial road map: Build a solid foundation for your financial goals. If some people can figure out how to save and invest smartly, you can also figure out yours.

You can start designing your road-map by identifying your crucial goals and making a list of everything you want to start saving for.

Afterward, prioritize the most important one and start saving. Stop making excuses for yourself; make up your mind to start anyhow.

3. Have a budget for all your needs: Plan every penny you wish to spend on your needs as that would make you avoid unnecessary expenses.

Also, have a rough estimate on what to buy when going to the mall as that would make you avoid buying things you do not need. 

4. Save towards a goal: Before you start saving, cultivate the habits of saving towards a goal. Think about saving toward your dream home, dream vacation, career, or education, then start the saving plan.

Saving towards a goal will not only make saving effective, but it will also motivate you to actualize your goals. 

5. Diversify: Learn to concentrate your investments in profitable investment portfolios that have survived the test of time. While using several stones to catch several birds may be effective in itself, it is best to avoid scattering your savings on several investment opportunities. Verify the authenticity of two to three investment organizations, then work with them. 

6. Save while you can: Economists believe that human wants are insatiable. So you will always desire to have something. And that desire makes saving difficult.

However, you will have to be disciplined enough to avoid postponing saving. A lot of people know the importance of saving but do not know how to start. Some are waiting for an increase in salary, while others feel they are too young to begin to save.

All of these are excuses. No matter how young or old, how low or high you earn, you can save if you desire to.  

7. Learn to put your money into good use: Your hard-earned money can work for you in different ways. You can either save, invest, or give someone your money to use while receiving a percentage of the monthly profit. While your money is working for you, you can also work on other projects to earn more money.

8. Ask pertinent questions before investing: Be eager to ask important questions about your investment’s potential. Carry out a thorough assessment and do your due diligence on whatever business you choose to invest in before investing. There are so many fraudulent investment schemes. Not being a victim is in your hands. 

9. Cut unnecessary expenses: Find a way to reduce your expenses and increase your savings by all means. The earlier you realize that there can be no investment without savings, the better it is for you. So as you work on reducing your expenses, also work on saving. 

10. Consistency: Be consistent and committed towards your savings and investment plans. Be comfortable with your savings, and ensure that your investment is left untouched. 

The most important essence of this article is not in the knowledge derived but in putting the content into practice. It’s never too late to initiate saving and investing. Save your future by starting NOW!
If you have any questions to ask or want to add some tips, please share it in the comment. Don’t forget to share this post with friends and family.

6 thoughts on “How To Start Saving And Investing Money For Beginners”

  1. Thanks for sharing this post! I also believe that saving money is possible at any income and it just takes some very thoughtful planning and dedication to improving one’s own financial situation. Great read!

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