Are You Saving OR Are You Investing

Are You Saving OR Are You Investing?

Alright so now let's get started.

Many people often misconstrue savings with investments. But let us tell you that there is indeed a difference between the two.

Merely putting aside money under the mattress, or in a vault, bank locker or savings bank account after meeting your expenses and liabilities may not mean that money works for you.

In times where the inflation bug is eating into your earnings, you need to move a step forward and invest. More importantly, invest wisely!

By now many of you may have realized that there is indeed a difference between saving and investing. So let's delve a little deeper and understand the difference between the two...which can help us march forward in our journey of wealth creation.

Savings Meaning:

• An act of putting aside money after defraying expenses and liabilities (...therefore the unspent income results in savings)
  

Savings = Income - All expenses including obligations towards borrowed money



• It's an act of economising 
  
• In Personal Finance parlance:
  

Savings refers to preservation of wealth for future use


The Right Approach to Increase Savings

• Refrain from impulsive buying (...It is imperative to stick to your immediate priority. Have a list while you go out shopping and be rational while making the list.)
  
• Make a monthly budget (...Ascertain your income... frame the budget in a way that allows you to save more.)
  
• Economise on expenses (...try to avoid those expenses which aren't necessary)
  
• Avoid excessive borrowing / credit (So while you may own and use a credit card, use it thoughtfully knowing your means - Remember: excessive credit can lead to a debt trap!)
  
• Start saving at an early age (...it always helps to plan for your future. Remember, you can always postpone your decision to buy your favourite gadget, but you should save for a rainy day.)
  
• You may start small, but save regularly (....Remember, your every bit of savings can help you attain financial freedom)
  

Conclusive remark on savings: 

Now that we have seen the right approach to savings, the question is, can saving alone help you achieve your life's goals? - Which could be: buying your dream home, your dream car, your children's education, their marriage, your retirement; amongst a host of other ones. 

Think about it. 

Do you know, over the years, the money that you have saved - kept aside in your vault, bank locker, savings account, or under the mattress - may lose value as the inflation bug eats into your savings if it is not allowed to grow at a decent pace? Therefore, in order for it to grow, you need to put your 'money saved' to productive use - and make money work for you! 

And what should you do to make money work for you? 

Well, the answer lies in INVESTING!