SAVE, INVEST AND SPEND SMART

Nowadays it is very important to learn how to save for the future, invest even a little of our income, and improve the way we spend the money we have.

Because we will reach a point where the population pyramid is going to be reversed, with more adults being older than young people who generate income for the country; It is important to learn to save for retirement, because there is the possibility that the pension you have for your retirement will not adjust to survive, due to the inflation that you have to live at that time.

WHAT DOES THE SAVING CONSIST OF?

In separating a percentage of your income and saving it for a short, medium or long term according to your needs.

-Short term. No more than one year.

-Medium term. Considered between one and five years.

-Long term. More than five years.

WHAT IS INCOME?

All the money you receive from your work, sale of a movable or immovable property, commission, donation, etc.

CONVENTIONAL FORMS OF SAVINGS

1. Open a bank account in which you can deposit, or they deposit the money you want to allocate for your savings and preferably look for a type of account in which you add some interest for the simple fact of having an account there. This is a good option if you have enough money to open a bank account, and you will be constantly increasing your balance.
2. Have a piggy bank at home, in which you enter a percentage of your income either daily, weekly, biweekly or monthly according to your preference. This is a good option considering that you are firm, and respect the term you considered saving, without taking money out of it.

OTHER WAYS YOU CAN SAVE

1. Avoid impulsive spending. Think before you buy something and make sure it is something of profit.
2. Avoid ATMs. Instead of taking money out of your account, you better invest so that it gives you more returns.
3. Pay students to cut your hair or learn how to cut your hair yourself. So you won’t have to spend time at the beauty salon.
4. Reduce time in the shower. Set a timer to reduce your time in the shower, saving time, water, and gas to keep it warm.
5. Stay away from shaving cream. Instead, use cheaper soap or even conditioner.
6. Invest in a solar heater. This way you will reduce your gas consumption and help the planet considerably.
7. Use a razor instead of rakes. This is how we contribute to the planet by reducing waste and avoiding irritation to your skin when shaving.
8. Keep an eye on the air conditioning. Prolonged use of the air conditioner increases your electricity bill considerably, reduces the time you use it and uses lighter clothing.
9. Turn off and unplug electronics. Turn off the TV when you are not watching it, unplug the appliances you are not using such as the blender, toaster etc.
10. No more cable TV payments. Watch open television channels, watch streaming services.
11. Thrift shopping. You can buy something already used that is still in good condition for a very low price.
12. Organize meetings cooperatively. Each person who attends the meeting brings something to drink and eat to share with others; so they try more things while taking care of their pocket.
13. Ask for discounts. When you go to a store, ask about those products that are on sale.
14. Drink water in a reusable bottle. Bottled water is more expensive, so take water from home in your own bottle, so you take care of the environment and save money.
15. Cancel subscriptions. All those magazines or programs that you no longer use it is better to unsubscribe.
16. Play the secret friend game. When it is the holidays instead of giving something to each member of the family or friends, write the names of each and each take a piece of paper. This way you will only give a single gift to a single person.
17. Swap clothes with your friends or family. So you renew your closet and your friends and family as well.
18. Reuse your towel. Instead of constantly washing your towel, wash it once a week to save water, detergent, and light.
19. Don’t use paper towels. Instead, wear clothes that you no longer wear and cut them into pieces to shake and clean.
20. Automate your savings. So every time you have some money, a part is going to be used for savings and so you don’t spend it on something else.
21. Use credit correctly. Pay on time so as not to generate interest and that you pay more than the bill.
22. Explore sales. Buy when it is on sale what you are looking for.
23. Coupons. Use coupons to spend less.
24. Avoid store credit cards. These types of cards sometimes have a higher interest rate.
25. Buy generic products. They are products with the same quality at a lower price.
26. Make your own coffee. It is much cheaper to prepare it at home than to buy it at the cafeteria.
27. Share the car. You will save gasoline.
28. Take a single trip. Plan your route to save gas.
29. Take the bus or the subway. It is cheaper to travel by this means than to use a taxi.
30. Get organized. Everything that you do not use and no longer need, take it out and sell it.
31. Prepare food at home. It is much cheaper and healthier to prepare your food at home.
32. Invest in reusable bags. This way you will take care of the planet and you will not spend on bags that only generate more garbage.
33. Find a convenient bank. Investigate which bank best suits your needs, and offers you better returns, or better interest rates on your credit cards.
34. Buy frozen foods. Because they are frozen they last much longer and do not spoil.
35. Don’t use liquid body soap. This is much more expensive and lasts less.
36. Keep your tires inflated. This way you will save more gasoline because it gives you more kilometers per liter.
37. Reduce your consumption of meat. Meat is much more expensive than fruits and vegetables, and consuming too much can harm your health.
38. Walk more or use your bike more. This way you exercise while maintaining a healthier weight and taking care of your pocketbook.
39. Stay sober. Wines and spirits are unhealthy and expensive.
40. Prepare your food yourself. The snacks that you can prepare can be healthier and at a lower cost than those you buy outside the home.
41. Every penny counts. Sometimes it is very easy for us to spend the pennies, so as not to carry the coins, but another option is to have a piggy bank and deposit them there to have another way to save.
42. Reuse gift bags or wraps. You can save them and use them again to wrap another gift; so you won’t have to spend again on a wrap.
43. Use tuppers to store food. They are very useful for storing food, keeping it in good condition, transporting your food to work or sending lunch to your children.
44. Go to free events. This way you take care of your pocket and you can have fun without spending too much.
45. Buy led lights. These require less electricity, which reduces your light consumption, and their useful life is longer.
46. Stop smoking. Cigarettes are an unnecessary expense, they cause cancer and pulmonary emphysema, they generate anxiety when you do not consume them, and it also becomes addicting.
47. Mend your clothes. Many times we throw away or give away those clothes that are already torn, but some can still be repaired by just sewing them and they will be in good condition for a long time to come. Do not spend buying more clothes, sew it and it will remain in good condition.
48. Make your own gifts. If you are talented and creative at crafting, there are pages that give you great ideas for making various things that you can give as gifts. You can reuse materials that you have at home and you will also save money.
49. Make a shopping list. Having a list prior to making purchases, so you only base yourself on it and avoid buying too many things.
50. Negotiate the interest you are paying. If your bank does not offer you the lowest interest, you can look for some other option than if it does.
51. Fill your gas tank first thing in the morning. So part of the gasoline does not evaporate and you require less gasoline to fill.
52. Cancel the gym subscription. Many times we subscribe and do not go due to lack of time, lack of interest or motivation. For the same reason, instead of going to the gym, choose to walk more, climb stairs, yoga, or some YouTube channel with which you can exercise at home.
53. Shop after the holidays. Passing the special dates, they put everything on a discount, take advantage and buy at that time.
54. Count to 10. When you want to buy something, keep the item in your hands for 10 seconds and if you notice that its price is not fair, it is out of your budget, or it is not what you were really looking for; better leave it.
55. Babysit her for free. When a friend or relative requires that you take care of their children, younger siblings, etc. You can offer to care for them for free in exchange for a return of the favor when offered.
56. Yard. If you have a garden, you can choose to have your own garden, so you will have fresh and inexpensive products in the comfort of your home.
57. Use a clothesline. Instead of using the dryer and spending electricity and gas, it is better to dry in the open air.
58. Buy in bulk. It is cheaper to buy in large quantities and refill your containers.
59. Find hidden payments. Review your invoices, and your account statement to make sure you are not paying for products or services that you did not hire.
60. Compare your auto insurance. When you go to buy insurance for your car, check out several insurers and choose the one with the greatest coverage at a lower price.
61. Compare your health insurance. Quote your medical expense insurance with several insurers and choose the one that best suits your needs at a better price.
62. Save water with each discharge. Add a bottle with a liter of water to your bath water tank; This way you will save a liter of water in each discharge.
63. Before buying something, make a budget. This way you make sure to buy only what you need at a fair price, and take care not to exceed your budget.
64. Spend less water to brush your teeth. Instead of putting your mouth in the running water to rinse your teeth, fill a small glass with water and use it to rinse them.
65. Prepare more food. Instead of preparing small portions, you can prepare larger portions and freeze a part and gradually take out what you are going to eat each day, thus saving gas or electricity, time, money and effort.

HOW TO DEFINE WHAT PERCENTAGE OF YOUR INCOME TO GO TO YOUR SAVINGS FUND?

1. Define the purpose of your savings. To buy something specific, go on vacation, pay for studies, have surgery, etc.

2. Set a deadline to achieve your purpose. Short, medium or long term; To do this, try to be as realistic and honest as possible, so that you comply with it in a timely manner.

3. Defines a fixed amount of monthly income, or an average monthly income balance. It is obtained by adding all the income that you usually have per month.

4. Consider your fixed expenses. They are constant expenses that generally are a fixed payment; such as electricity, water, telephone, internet, medical insurance, car insurance, house rent, studies, etc.

5. Consider your variable expenses. What you spend on food, trips to restaurants, vacations, clothes, etc.

6. Avoid ant expenses as much as possible. These are impulsive expenses, not considered at the outset. Example: You go to the store to buy bread, water, make a cell phone recharge or make a payment and you end up buying something else like gum, fried foods, sweets, etc. You acquire something additional to what you really were going for. These expenses, even if they are small when you add them at the end of the month, is an amount that you could have saved, or spent on something more useful.

7. Taking into account your income and your expenses; now you can define how much money you will save. Example:

Monthly income: $ 9,000.00

Fixed monthly expenses: $ 5,000.00

Variable monthly expenses: $ 2,500.00

TOTAL YOU CAN SAVE: $ 1,500.00

Suggestion: Dedicate a part to savings and another part to investment.

INVESTMENT

It consists of allocating an amount of money to a person, or a third party, in order to acquire a greater benefit over time. Investments will always have their risks, some will have more than others; For this reason, it is important to know them and choose the type of investment that best suits your needs.

TYPES OF INVESTOR:

• Risky. It is the one that seeks to obtain more profits in a short period of time, taking into account that the risk is proportional to the investment. The higher the returns, the greater the risks of losing everything.
• Conservative. It is the one that seeks to take care of its capital and have a lower profitability, a fixed income investment in the medium or long term.
• Moderate. It is a middle point between the previous ones, it looks for a greater profitability as the risky one, but without risking all its capital; in turn, they are fixed income but more attractive than those of the conservative, being these in the medium term.

INVESTMENT OPTIONS:

• Properties. You buy a house, an apartment, a piece of land, or a commercial space, in order to sell it at a price higher than the purchase price or rent it to obtain an income.
• Actions. They are securities that some companies issue in order to finance themselves. The people who acquire the shares have certain rights such as obtaining dividends from the company; or even if they want to sell their shares at a higher price than they bought them. This is a high risk type of investment.
• Investment funds. It is to pool investors’ funds to invest them in different assets, such as stocks, bonds, etc. This type of investment is carried out with a financial professional.
• Bonds. They are debt securities with which companies, governments, or entities issue in order to finance themselves, giving the owner an interest periodically until the maturity date of the bond. This type of investment has high returns, but lower than stocks and does not require technical knowledge to invest. The longer the duration, the greater the risk and vice versa.
• Binary options. It consists of choosing an asset or a currency and betting or predicting whether its price will rise or fall. Similar to a bidding system, where speed of management is important. It is a type of high-risk investment, because you can lose everything in a few minutes, because the investment is short-term.
• Fixed term deposits. It is a safer and easier option to obtain returns. A financial institution offers you an interest in exchange for keeping a certain amount of money for a certain time; once the time has passed, the entity pays you the agreed interest.
• Microcredits. They are small loans that are granted to groups with few resources and have difficulty obtaining credit. You invest capital either in one or several projects, in order to reduce risks and obtain better returns. You can invest in a short, medium or long term according to the projects you choose.
• Crowdfunding. It is a collective financing that is carried out through online platforms, in order to finance a specific project.

Types of crowdfunding:

1. Crowdfunding. You get a reward in the form of a product or service.
2. Crowdinvesting. The consideration is through shares or participation in the company, obtaining benefits in the medium or long term.
3. Crowdlending. It is contributed in exchange for an interest on the borrowed money, this interest rate will depend on the amount borrowed and the repayment term.
4. Crowdonation. The contributions are disinterested without expecting any reward.

• Business angels. It is to find ideas that are going to be launched on the market or recently created companies; to invest your money in them in exchange for a shareholding, and thus help them grow. The idea is to later sell these shares to obtain higher profits. The risk is very high because the success of the idea or the company cannot be predicted.
• A business. Start a business from scratch or buy a business that already has customers. The purpose is to make a profit and if you sell it in the future, it should be at a higher price than the purchase price.
• Franchises. It is the right that a company (franchisor) already established in the market gives you so that you (franchisee) can open a store with their brand. The advantages of acquiring a franchise is that it is already positioned in the market, it has the credibility and loyalty of its clients, and you will also have the supervision and guidance of a parent company. You cannot apply any changes on your own, unless approved by the parent company.
• Gold. Buy gold to sell it more expensive later and thus make a profit. This type of investment is medium or long-term due to price instability and having knowledge of when to buy and when to sell to have good returns.
• Silver. Buying silver is an alternative to gold because it is used for industrial consumption and is depleting, causing its value to increase even faster than gold. The price of silver is low, but its value is expected to increase considerably.
• Artworks and collectibles. Buy paintings, sculptures by well-known or emerging artists, stamps,coins, jewelry, etc. Objects that with the passage of time considerably increase their value with respect to the purchase. Just keep in mind that it is important to have the veracity of objects that are not forgeries; that require care and maintenance to keep them in good condition. While you sell them you can rent them in a museum or gallery to take advantage of them. They are long-term investments.
• Theater or cinema. They can generate good returns, but it is a high risk investment since you do not know how the public will react and how much demand it will have. This type of investment is made in the short term.
• High quality wine. Its value increases just by getting old, even if the taste erodes and cannot be drunk, being a consumable product and increasing demand, there is a limited supply. That is why it is a stable investment in the medium and long term.
• Money in you. Investing in your education and specialization helps you to get a better salary in the labor market, or to start something of your own.

WAYS TO ACQUIRE MONEY PASSIVE

• Paid surveys. They pay you to answer surveys about your opinion regarding certain products or services.
• Applications to earn money. Some applications mention several ways to earn extra money.
• Advertisement. Some websites pay you to view advertisements.

SPEND SMART

It is very important to think before purchasing any product or service, prioritize our expenses and identify which ones are: necessary, for pleasure and those that harm us.

• Necessary. They are those that we cannot do without; such as food, water, electricity, housing, health, education etc.
• Pleasure. Outings to restaurants, vacations, acquiring things you don’t need and think you need, recreational spaces (outings to plays, concerts, etc.).
• Those who hurt us. Foods and beverages with a low nutritional content and high in fats, sugars, calories and sodium; alcoholic beverages, cigarettes, drugs, shopping in excess of unnecessary things.

Taking this into account, you can do without the ones that hurt you and give yourself some for pleasure, so that you do not lack those that are really necessary.

BASIC PRINCIPLES TO SPEND INTELLIGENTLY FOR PLEASURE.

1. Buy more experiences and less material goods. Spending on experiences is something that does not have an expiration date and you enjoy it much more than material goods that you probably no longer use or even use little.
2. Use your money to benefit others. Donate a part of your money to help another, we directly relate it to increasing happiness, because it gives you great personal satisfaction knowing that you can get someone else out of trouble.
3. The happiness of little things is a waste of money that few recognize. Many adapt to a routine of small purchases that give you that feeling of happiness like coffees, food, clothes, etc. Learn to spend on what will give you a long-term benefit so you won’t lose the feeling of happiness so quickly.
4. Insurance. Like your cell phone, computer etc. There are things that do not require insurance and only fill you with fear and insecurity, avoid spending on an overprotection that you are not going to use and take better care of your things.
5. Give up the pleasure of today for that of tomorrow. Impulsive purchases that you will not get as much benefit from in the future. Eliminate the acquisition of objects that give you immediate pleasure and look for those that give you prolonged gratification.
6. Follow the crowd on some occasions. Before buying, investigate its quality and performance, the recommendations or opinions of other buyers will save you from a bad purchase.
7. Avoid comparing products. Sometimes a bad comparison will lead you to spend more than what you had budgeted at the beginning, the key is to buy something functional for you and your needs.
8. Think about how the purchase will affect you. When you buy something be sure to measure the impact on your finances, so you will be a more conscientious consumer.

Suggestion. Get into the habit of thinking ahead, considering what your life would be like with what you plan to acquire, and how many benefits you will obtain from that; This way you will seek greater satisfaction in a longer time, making a better investment in your own benefit.

OCCASIONS WHEN IT IS BEST TO SPEND

• To increase happiness and spend more quality time doing what you love. Time is a non-renewable resource that is worth gold and happiness is a very precious commodity at times in short supply. Therefore, if you can treat yourself and that will bring you happiness without putting yourself in trouble in your monthly budget, you can give it to yourself. Or to enjoy your time with family, with friends or doing some activity that contributes to your happiness and your budget allows it; hire someone to clean the house and do the heavy lifting-
• To protect the family with insurance. When the father or mother dies, and the family depends on that salary to live, or when something happens and they cannot continue working; life or disability insurance can be very helpful.
• You saved up to buy something. When you get the money and you don’t know if you keep saving it or spending it to buy that car, a house, a trip, etc. First you acquire it because it is a reward for your effort and dedication, and secondly because that is how you realize that you can achieve everything you set your mind to.
• For health. The most important thing is physical, mental and spiritual health; therefore it is advised that if you need to spend some money to improve your health, do it without hesitation. Money comes and goes, health is something we should not skimp on, since life goes away in the blink of an eye and at the end of the road we are not going to take away anything.
• Hire professional help. We are not experts in everything and at some point we will require someone else to solve something for us; like an accountant, financial advisor, plumber, electrician, etc.
• Quality products. Cheap is often expensive, so look for something that will be useful for you for a longer time; shop smart, do your research, and make sure it works for you and meets your needs.