It is very obvious that money is very important in people’s lives. People should know the importance of money in the context of spending, saving and investing.
In order to understand this more, people should know the meaning of the following terms:
- Savings. It is part of your income that you won’t spend on expense but keep aside to fulfill your future need or requirements.
Consider the following when saving money:
- Make a list of your expenses and income
- Make a budget for how you want to spend on your expenses
- Do plan, how much portion of your income you want to save.
- Choose an objective of saving money and do saving accordingly.
- Keep your objectives according to priorities and save accordingly.
- Keep an eye on your budget and savings accounts.
- Investment. It is buying something so that it either appreciates in the value or provides regular income is called Investment. There are many ways to invest your money, like in equity shares, mutual funds, fixed deposits and real estates.
Consider the following when investing:
- Set or fix your amount of investment.
- Determine your objective in which you want to invest
- Fix your risk tolerance that you can take on invested capital
- Fix the time period, it can be short term or long term.