Although saving money and investing wisely may sound like an oxymoron, it doesn’t have to be that way at all. In fact, with these 6 tips you’ll be able to get started on a financially savvy path that will leave you feeling secure about your future and allow you to save money and invest wisely with ease.
Live within your means
Spending less is a good way to invest more. Keep your expectations low, and you’ll be pleasantly surprised how much you can save. A realistic guide to Europe is not just about cutting back on what you want; it’s also about adding more of what you need. You don’t need a car, for instance, because the public transportation system works well in most cities in Europe. That saves money on gas, auto insurance and taxes—and makes your decision to live without a car easier.
Invest in yourself
The best investment you can make is in yourself. You are the only person who will be with you for the entirety of your life. Learning new skills, getting a degree and building up your resume are all ways to invest in yourself and increase your worth as an employee or entrepreneur. Read books, take classes and explore what interests you – all for free.
Invest in a 401k or IRA
A 401k or IRA are both retirement savings accounts. With a 401k, you deposit pre-tax money into the account and it’s not taxed until you withdraw the funds. With an IRA, you can invest post-tax money and your contributions are tax deductible. If your employer offers a match for your 401k, it’s always worth contributing at least enough to get the match.
Invest in stocks
To invest wisely, it’s important to have a well-rounded portfolio. That means investing in stocks, bonds and other investment vehicles. This will help you diversify your portfolio and increase the likelihood that you’ll see a return on your investment. You can also invest in mutual funds or exchange traded funds which allow you to buy into a collection of stocks at one time.
Have an emergency fund
An emergency fund should be one of the first things you put money into. This will give you peace of mind and a much easier time handling your finances if an emergency does come up. You can set this up by automatically transferring a percentage of your income every month to a savings account that is only used for emergencies. You should aim to have at least three months worth of living expenses saved up as an emergency fund.
Don’t let your emotions dictate your investment decisions
If you’re investing for the first time, or if you’re just starting to invest again after a break, these are some tips to keep in mind:
Don’t let your emotions dictate your investment decisions. When making an investment decision, it’s important to not let your emotions get the best of you. You’ll want to make a logical decision based on what will give you the best return.
