How good are you at saving money? And what is the state of your savings, emergency funds, medical funds, vacation funds, and so on? What are your strategies? Do you use the good old stuffed mattress system? The number one requirement in saving money is persistence. Unless you win the lottery, which will give you an instant pile of savings, then your best bet is discipline and sticking power. You must put together a system that works for you in your situation and just stick to it. Once in a while it is also good to review whether you should modify something due to a change of circumstances in your life.
Options in Saving Money
Beyond the stuff the mattress system, you have a broad range of options available in the 21st century. First you must pick how much much money you want to save and for what. Best place to put your money is into anything long term. Something, where you can’t touch your money and spend it in just a few clicks.
This type of fund is good for its accessibility. It is money that’s always available if you need it. Usually in a matter of seconds. You always need to have some extra cash available on a short notice. However, if you’re a spender type, then it is not a good idea to use solely this method.
This type of savings is for retirement purposes only and it is available to employees only. If you are not employed. It is not for you. The great part about this form of savings is, that withdrawal from this account has very specific rules. It will definitely help you in the being responsible department.
Many investment apps will give you the opportunity to round up your transactions. What that means is that you link your account and the app monitors your linked account and just adds up small change from each transaction. Once this app achieves a certain number, e.g. $5.00, it then deducts that money from your checking account and invests it for you. One of these apps is Acorns. Acorns is essentially a fund, or better yet three funds, which you contribute to and can pick your risk preference.
Another famous investment app is Robinhood. This app now gives you the option to purchase fractional shares. Meaning that you can setup your account to invest, deduct from your account, say $100.00 a week and you can by a pice of Tesla every week, until you reach 1 entire stock. Or you can just purchase a fraction of ten different stocks to have a diversified portfolio. Withdrawing money from investment apps takes a few days. This delay will help to keep you on the saving track.
Getting a Mortgage
This savings option is very long term, and it doesn’t offer an easy withdrawal option. To withdraw money, you must sell your real estate or take a second mortgage. But again, the monthly payments will keep you disciplined.
Buying a Life Policy
Another possible option you have is to purchase a life policy. Now, term policies are for protection only, they don’t have any cash value aspect to them. In order to build any cash value, you must purchase a whole life or indexed universal policy. With life insurance, you must be prepared for a long term investment. There’s virtually zero cash value for the first few years. However, there is the instant estate aspect. Meaning that on the day you sign the contract, you have coverage with the full face amount. Should something happen to you, your loved ones won’t have to suffer financially. Something none of the options stated above offer you.
If life insurance is something you think is the right choice for you, then fill out our online form a free quote here and let’s get a conversation going.