How to save and earn more money?
Have you saved for a long time and your finances do not improve? Your discipline to save seems to be in vain. What helplessness!
Now, do you want different results? So act differently. Find out what’s happening and why saving doesn’t increase your income.
You should know that there are factors that devalue your savings over time and there are others that can enhance them. If you are still not clear about it, this information will be useful for you.
Next, learn in detail the elements that negatively and positively influence your savings and how to earn money . Let’s go!
First of all, what does it mean to save and how to do it well?
The definition of saving varies for each person according to their beliefs or customs. But, in objective financial terms, this supposes concrete actions to obtain concrete results; in this case earn more money.
According to Wikipedia, saving ” is the action of separating a part of the income obtained by a person or company in order to save it for future use.”
People save to complete certain plans for the future, to solve unforeseen events, such as financial security support, for retirement or others.
Based on such a definition, let us know the effective guidelines for a well-done savings discipline.
|Save EN||means what||IT IS NOT saving|
|Separate part of the income||– A percentage of ordinary income is taken. A minimum of 10% is recommended.
– It is a fixed reserve that is part of the budget.
– Involves budgeting income.
|Save what is left
Save when you have left
|It is intended for a (specific) use in the future .||– A “what for” is assigned to saving.
– There is a reason or priority that gives meaning and permanence to the action.
|Borrow or use for other things.|
Rethink your actions
If you’ve done it wrong, it doesn’t matter. You still have time to correct the errors and you can do so by considering the following:
- Commit yourself and set aside the minimum savings before making expenses.
- Stop wondering where the money went . Make a budget! You decide where you will go.
- Set priorities, clarify your goals and avoid indefinite savings . The idea is to make it useful; above all, if it is to multiply it or generate new income.
- Keep in mind that identifying other possible income is what will bring stability to your savings.
Once you have organized yourself with it, it is convenient to apply the appropriate strategies so that your savings do not lose value over time. Take action sooner is better.
How do your savings lose value?
To save with purpose, you must know that money has a temporary value and one of the most influential factors in its devaluation is inflation.
Inflation is the excessive increase in the prices of goods and services. In other words, it is a general and sustained instability of prices over a period of time.
The economy of any country suffers from it. It takes place when the demand for goods exceeds the supply, causing an increase in prices; also in the face of an increase in the cost of raw materials or an increase in wages.
BBC News-World has shared an updated report that explains why inflation is rising so much globally. It is a reality that cannot be avoided.
Inflation pulverizes your money
This price instability causes continuous consumption. You will prefer to buy a product today for fear of buying it more expensive later; Even if it’s not a priority. Nothing further from savings than this.
On the other hand, inflation limits the spending capacity, but not precisely in terms of savings but because the purchasing power of your money is reduced. This is the worst effect on your savings.
How much did you pay for a liter of milk 10 years ago and how much do you pay now? You need to have more money to make your usual purchase, right? And this is what will continue to happen over time.
Therefore, saved money is dead money. The single act of saving will not earn you more money.
So how do you make more money?
Undoubtedly, the basis of financial stability is to raise your income and then invest. The idea is not to live limiting your expenses but to generate additional sources of income to your work or business.
Organize what you have now
Create an emergency fund for unforeseen and real emergencies. It will allow you not to overload your budget and will prevent you from borrowing.
Lean on the possibility of renegotiating your salary to get a raise. Consider valuing and selling your talent instead of your time.
Commit to seriously reducing your expenses. Do a monthly review. Above all, the “moth expenses”; those kinds of expenses that invisibly eat away at your money like unnecessary cravings, buying more liabilities.
Identify new forms of income
If today you have your job or business as your only source of income and something happens suddenly (layoff, drop in sales), would you be prepared to support yourself?
By having multiple sources of income you create a strong foundation despite the risks. If any fail, your finances will not collapse.
It may be your opportunity to discover other gifts and talents.
Move your savings
It is worth sharing this interesting illustrative video and expanding the vision a little.
In addition to saving, as I explained before, you need to give and maintain the flow of your savings. If we talk about fluidity we talk about movement. So the money has to be moved.
Money is a tool to build assets.
That is, your savings should be directed to creating assets that generate more income (profits). The greater the source of income, the greater fluidity and financial freedom.
Investment is movement
You need to invest for three simple reasons:
- It is a way of maintaining the purchasing power of your money. Well, stagnant money loses value.
- You increase your sources of income.
- Your money works for you; that is, as compound interest.
Investing or starting a new business is scary because it is something new. It is easier to stay stuck attached to what is known and apparently safe.
The following reflections can help you eradicate what you have learned to fear:
- You are afraid to invest, but… not to get into debt?
- You are afraid to undertake, but to depend on a job, right?
Investing in financial education to make better use of your resources and your savings is another necessary option that can give you courage in the decision.
A few words to conclude
The way to save and manage finances is a matter of culture that, although it is difficult to break, is not impossible to transcend.
The instruction on saving that they should have given us since we were little is this: “Work generates money, money buys assets and assets will put money in your pocket.” Saving is the first step to earning more money.
Collecting assets will put money back in your pockets. To move money, investment value is required accompanied by adequate advice.
Increasing profits and taking advantage of savings is a decision to change.