Next Steps To Incease Savings & Investing:
Set a Goal
Whether you’re saving for a car, an emergency fund, investing for retirement or saving for a down payment for a house. The end goal is will drive your action to get there.
Determine what you can Save or Invest:
After reviewing your budget, determine what you can set aside to save or invest. Will you be making monthly contributions or will it be one lump sum set aside?
Set your accounts to automatically transfer funds. If you have to decide to do it again each month – you likely won’t. Set your future self up!
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What is dollar cost averaging?
Dollar Cost Averaging or (DCA) is the act of setting aside a fixed amount of funds each month to invest. The automatic nature takes the emotion out of investing and allows you to keep buying whether you think the price is low or high.
Time Value of Money.
The value of money changes over time due to inflation. Ever look at the prices of gas, food, and houses 30 years ago? The same thing happens with the value of the dollar. Investing allows you to keep pace with inflation. A low-interest account can result in your money losing value over time.
When should I start saving?
Like a tree, the best time is 20 years ago. The second best time is today. Saving should have a goal: building an emergency account, a 3-6 months savings account, or setting it aside for specific items. You might not get the best interest rate in your savings account, but having cash on hand gives you peace of mind in case life happens.
Compound Interest - The 8th wonder of the world.
Get your money working for you! As your fund value starts to grow, the amount in your account will start to earn you more interest. Then you’ll earn interest again on the interest you’ve already earned. There is a snowball effect. It just takes time. The longer funds can sit in the account to grow, the more you’ll have.