Saving and Investing Without a Goal: Is It Okay?
As one embarks on the journey of building their wealth for the future, it is important to have a good mixture of savings and investment depending on your short and long-term goals. However, starting early makes it easier to achieve all your financial goals.
We all know that money is a hard-earned thing. It will grow once you start saving or investing it through various means and most of all by setting up your goals. Without a goal, your money won’t work for you the way it does when you have a planned agenda up in your mind for the future.
Before getting started with your investment and saving plan, you just need to know about these two terms and how they work.
Saving is the portion of income not spent on daily, weekly, or even on monthly expenditures saving is that part of your income that is not meant to spend on monthly expenditures. Rather, it is planned to keep safe until any somewhat emergency, unexpected events or financial urgency arrives to pay for. It allows you access to your money at any time so that you can use it whenever you feel the need to.
Without savings, unpredictable events can become huge financial burdens or could burn a hole in your pocket. Therefore, savings help an individual or family to become financially secure, stable and equipped enough to get out of these circumstances safely.
Managing money nowadays is probably the most underrated skill not everyone is aware of. Many of us do have some knowledge about saving, but there are still many who lack the skill in investing. There are many ways you can learn to invest but probably the best is to take a small amount and try it. As they say, experience is a great teacher. Sure you will learn a lot from taking seminars and courses but the best way is through nose-diving yourself in it.
Setting Your Goals before Saving and Investing
Setting goals gives you a lead for your plan and a direction toward which you want to head. When setting up your financial goals, you will want to consider obvious objectives such as monthly savings, retirement investments, or anticipating future expenditures, you would like to make and apply them to your financial plan. It helps you put in structuring your finances in a way so that you can afford them as they begin without having to make sacrifices elsewhere in your budget.
Setting goals is the first rule of saving as well as of investment. There is no way you could have thought of saving or investing without having a goal. Before you make a buy, there are chances that you might have your purpose set for which you are planning to save or invest or doing both.
You can always make a start from setting up short-term or intermediate goals as eventually; it will lead you to hike for the bigger goals.
Benefits of Saving and Investing
Although, there is very little distinction between savings and investment. However, when you are saving or investing for your goals, you need to know where to set your foot first in order to save yourself from getting into any sort of financial trouble. For that, you need to know the difference both of them possess which makes them unique and optional that helps you get your hands on any or both of them.
There are plenty of reasons you should be saving your hard-earned cash. For one, it is the safest bet and the best way to avoid losing any money along the way. Saving is definitely a more secure move than investing, though it may not give you the most wealth in one go. Whereas, investment products such as stocks can have much higher returns than savings accounts.
Savings are easier said and done and you can access the funds quickly when you need them. On the other hand, investment brings you a little delay and hassle to get back your invested money when needed. It’s better to keep it invested and get them out once it grows so that you can have a much bigger chunk of benefit at the end of the day.
You can earn with the investment, more than from savings but it involves risk. There is always a chance that you might lose it all or some. Return is not guaranteed in investment. Whereas, saving is definitely a safer more than investing, though it may not mean the most wealth in the end. It also includes risks such as if your savings are in the bank, very little, but there is a chance that a bank can be failed. Therefore, we cannot say savings are completely safe but comparatively, it’s safer than investment.
If you are planning to buy an investment/saving plan or thinking of revising the current one, you can always reach out to Prudential. Their team of financial experts is ready to assist you anytime with any investment or savings-related queries or questions.