What Is Personal Savings Really All About and What Should You Know?

2020 made us rethink how we are dealing with our finances and how well we know about the finance world itself. Savings accounts, investing, "rainy day" funds, everything started to make more sense and be more important than ever. You can see many young people discussing and going into serious money topics on the internet (with good research background) because they do not teach us how to do our taxes or when to start saving money. Maybe you had a part-time job when you were younger to save up and go out with your friends, but this is not enough to teach us that we should save from an early age (in a bank). The later you start, the less profit you will have. It doesn't mean you shouldn't because you will gain something in return, but when you compare a 22-year-old and 30-year-old who started saving with an 8-year difference, you will see how much you could save up if only someone were there to tell you.

Saving mentality

To figure out what type of savings would be the best for you, you need to know what kind of spender you are. When talking about personal savings, many people will mention what they put aside for "rainy days". Maybe some of them will talk about investments or retirement funds. These people are the minority because they might have been lucky to be taught by their parents about finances well enough, or they had to start exploring and learning more because they had to find a way towards financial stability. Whatever the case is, you are the one who needs to rethink what you are spending on and what is of real value to you, and what you are spending on impulse. What are the reasons? What are you trying to replace with objects? Of course, there are substantial investments such as a laptop so you can work and be in touch with the world, but is it an investment if you are buying a new iPhone whenever one comes out, even if there isn't much difference? Working on your relationship with money is a process, it won't change overnight, but start small. Pull up your credit card bill, and you will see you had some unnecessary expenses you weren't even aware of. Treating yourself is fine, but if you are doing it too often, and you aren't in a position where you can leisurely afford it, rethink your saving strategy, and make one if you don't have it already.

What can you invest in?

Personal savings are considered investments, as well. Think about it by saving money. You are investing in your future and making your life easier. When investing in learning another skill that will prompt your job position, investing in learning is also something that can bring you more money so you can save the same amount if that is your choice, or save a bit more while spending the same amount of money as you did.

How can you manage savings?

We mentioned you should check your relationship with money, meaning what kind of emotional attachment or patterning you have regarding money. Does it scare you to have too much? Do you think you can never have enough, no matter how much you earn? Talk to a financial advisor if you feel overwhelmed once everything is on the table. Get informed. Read some books about it and take advice from people you think they are managing their money correctly. Go to your bank and consider all the options they offer. If it doesn't suit you, or the fees are too high, search up a bank that you think has the best options. Think about an RFA fund. See where you could spend less if you need more money or you don't feel secure enough. Reconsider every option. Whether you are investing in your time, knowledge or stocks, consider how you can save in the long run once you gain from it. That's how you'll know if it's worth it.

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