Saving:
What would you call saving money? I would call it putting money aside for a future date and time, whether the exact date and time are known or unknown, or saving money for your future self to spend. We all know we should save, but many of us don’t want to, know how to, or use an excuse(s) as reasons why we can’t save. In a way, saving money is about paying your future self. Maybe it is the future self that has an emergency car repair. Maybe it is the future self that wants to travel the world. Maybe it is the future self that wants to buy a ‘forever’ home. It will be easier to save and save more when you find your own ‘why’ for saving.
Investing:
Investing is simply using a portion, not all, of your savings to increase its ability to grow outside of a savings account. You can invest in individual stocks and bonds or in baskets of stocks and bonds through mutual funds and exchange traded funds (ETFs).
What is an emergency fund?
An emergency fund is exactly what it sounds like. It is money set aside for emergencies. An emergency fund should be the first place you save, and your minimum emergency fund goal should be enough to cover 3 months of expenses, including housing, utilities, food, monthly loan payments, and insurance. While you are paying off your debt, you should also be building an emergency fund. If you are debt free, you should be building or already have an emergency fund. The current pandemic of the coronavirus has shown how important an emergency fund is. Your emergency fund should also help ease your financial stress. If three months isn’t enough to make you feel comfortable, save to have a larger emergency fund. But 12 months is probably where the maximum savings should be for just about everyone.
This page will link to blog posts and information about saving and investing. To start I set up a page called “Growing Your Money.” Take a look