There are so many guides on the internet offering advice about how we should budget for our monthly spending and how we should look after our finances in the short term – but what about our long-term financial security?
By providing you with a few tips on how you could budget for a better financial future, this guide could help you stay in control of your finances for many years to come.
Savings and Investments
We're always hearing that saving for our future is important – and there's no denying that it is… but how should you actually go about it?
Well, there are several ways you could approach saving your money and we're going to take a quick look at two of these now.
The first, and most obvious, is by regularly paying money into a savings account. By doing this, you'll be able to build up a fairly sizeable ‘nest egg' that could offer you protection against expensive costs later on in life.
One good thing about savings is that the money you deposit in your account will gather interest at the rate advertised by your account provider – so, in a way, you'll actually be getting ‘paid' by your bank to save with them.
The second way you could save your way towards a more secure financial future is by investing your money in stocks and shares. While this isn't as ‘safe' as simply paying money into a savings account, you could actually make more money by doing this.
For example, if you were to buy shares for, let's say $3 per share, you may be able to sell these on in a few years for $8 a share – which means you've made a profit of $5 per share (minus any fees) and will be left with almost three times as much money as before.
It's important to note, though, that with a savings account, you won't actually lose money… but you may lose money when investing in shares – as the price can go either up or down.
Repay your debts sooner, rather than later
Another way you could help to protect your financial future is by repaying any debts you have sooner, rather than later.
Of course, this depends on your ability to repay the money you owe (i.e. your financial circumstances), but if you're able to contribute more each month towards repaying your debts than you are doing now, you should seriously consider it. Not only will it allow you to become debt free sooner, but you could save a lot of money in interest too (as your debt won't have as long to gather interest).
So, there you have it: two useful tips to help you budget for a better financial future. Of course, you're only going to be able to implement these tips if you're in full control of your finances as they stand. If you're not, it might be a good idea to seek professional debt advice before any problems you're facing can get any worse.
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This article was written by Melanie Taylor, who has over 15 years experience advising on getting out of debt.
