Though they do realise the importance, quite a number of people find saving and investing their money rather difficult and thus they tend to keep putting it off. This is because most people think that one should have lots of money or a high level of financial knowledge before you can save and invest successfully. This is, however, not the case. Saving and investing can be easy and here are some simple ways.
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Adopt moderation and start small: If you are going to save money, you should of course have some spare money. You will need to spend less and be more moderate about your expenses so you can have some change left over. Cut back on unnecessary spending and save the money you are able to recoup. You need to save money before you can invest it even if you are only able to start with just 40 pounds. Kiplinger advises that whatever the amount is, start with it.
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Budget: Learn to budget for every amount of money that passes through your hands. It helps you to keep track of your expenses and to have a better handle on your savings and investments. Your budget does not have to be a complex one, a simple one will do and you can find resources online to help you.
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Automate your savings: It can be quite difficult to manage your needs and money in your account when you have to ignore your needs just to save some money. Most times, most of us would withdraw the money and use it to fulfil our needs. A good solution to this would be to take the money entirely out of the account without having to deal with the emotional setback of ‘not saving’. However, you can set up a system with your bank in which automatic withdrawals can be made from your current account periodically, and sent into your savings account. This way, you will not see the cash at all or have access to it so you will not be able to spend it.
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Invest in gilts: With a little saving, you can easily invest in gilts which are bonds issued by the UK government. Buying bonds from the government is virtually risk free so it is a good place to start. However, it has low returns so if you are looking for high yield investments, you might want to look at other options.
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Treat yourself: If you are cutting out all unnecessary expenses and living frugally just so that you can save and invest, it can get a little tiring and drab. It will not hurt for you to give yourself a small treat or gift once in a while. It will go a long way in keeping you motivated and making saving and investing easy. However, ensure that you include this treat in your budget.