Savings
When you save, you are setting aside present income for future use.
Investments
Investments are a risky way to make money, but they can get you a good amount of money if you are smart with what you invest in. Overall, the risk is high, but the reward can be very high.
Emergencies
No matter how much planning you do financially, there will almost always be an event that you didn't expect. For example, your refrigerator might suddenly stop working, resulting in your food spoiling, and having to buy a new one (if it is serious). To protect yourself from not having enough money to fix these problems, it is smart to set up an emergency fund. This will help you out big time in the future.
Recurring Expenses
Recurring expenses are expenses that you buy consistently overtime. Examples of these types of expenses include a mortgage, car payment, cable bill, phone bill, utilities, etc. These expenses demand a constant stream of income because they are also constant in nature; they never really go away, for the most part.
Future Purchases
Have you ever wanted something really bad, but you just didn't have the money for it? This is something that a lot of people experience. Have a plan set up overtime. To do this, you can calculate the amount of money you need to buy that item, trip, etc, and make sure that you set aside that amount every week. With the proper planning, what you wanted so badly can now be yours.
Financial Goals
Financial goals are goals that people set for themselves overtime. An example of this would be emergency savings funds, saving to pay off debt, saving for retirement, buying homes, college, etc.
Retirement
When a person chooses to leave the workforce. The concept of full retirement – being able to permanently leave the workforce in old age – is relatively new, and for the most part only widespread in first world countries.
Read more: Retirement Definition | Investopedia http://www.investopedia.com/terms/r/retirement.asp#ixzz4bz8aLPvT
Read more: Retirement Definition | Investopedia http://www.investopedia.com/terms/r/retirement.asp#ixzz4bz8aLPvT
Mutual Fund
A mutual fund is a variety of shares in many stocks, which, most of the time, makes your profit. They are professionally managed, and they are very well known.
Different ways to cut spending
Watch this video to get an idea of how you can save everyday.
Compound Interest |
Simple Interest |
Compound interest (or compounding interest) is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. Thought to have originated in 17th-century Italy, compound interest can be thought of as “interest on interest,” and will make a sum grow at a faster rate than simple interest, which is calculated only on the principal amount.
Read more: Compound Interest Definition | Investopedia http://www.investopedia.com/terms/c/compoundinterest.asp#ixzz4c4ws1XvZ |
Simple interest is a quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the daily interest rate by the principal by the number of days that elapse between payments.
Read more: Simple Interest Definition | Investopedia http://www.investopedia.com/terms/s/simple_interest.asp#ixzz4c4x6SmhJ |
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Pay Yourself FirstPaying yourself first...
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