What is investing and saving money?

What is saving money?

Saving money refers to putting money aside on a regular basis. You spend below your means and put whatever left behind in the bank. You should have this done automatically after collecting your monthly pay check. Before you have set aside an emergency fund ( normally people advise 6 months of expense), it is advisable that you do not invest.The easiest way to save is to view saving as part of your expenditure. Everyone should save for a rainy day because you never know when you will need the money. Cutting down on your expenses does not mean that you will not be able to enjoy life. The money save can then be channelled to accumulate wealth through investing. Starting on your saving plan can be tough mental and emotional challenge if you have never been saving all this while. However, after you have done it for a period of time, you will find that you actually get a charge out of saving.

What is investing?

Investing refers to once you have set aside the emergency fund, that is when you can begin to invest your money. Investing also means you have money put away for future use. Investing is the smarter way that you begin to really grow your money and begin to build your wealth. You just can't leave it in the banks here. If you keep your saving in a saving account with the bank, the amount of interest you earn may be too small. With inflation, the purchasing power of money will be eroded. When the general price level rises, each unit of currency buys fewer goods and services. However, if you invest in unit trusts, stocks or real estate, your return will probably be higher. In this case, your wealth begins to grow. Investing isn't a rocket science. However, before embark on the journey of investment, get yourself to be financially literate.

  In the journey to financial independent, it is important that you spend less than you earn and focus on getting out of debt. If you accumulate debt as fast as you save and invest, then you are not going to come out ahead. Begin budgeting, then you can begin saving and investing.