Why Saving For The Future Never Works Out The Way You Plan

Making the sudden realization that you don’t really know much about money can be a terrible predicament, especially if your lack of knowledge has kept you stuck in a life you never imagined.

Educating yourself financially can help you overcome what seems like a deliberate effort to keep you in the dark on the subject of money, especially when it comes to keeping it.

Only then will the answers to questions about balance in life, when it comes to saving and investing as opposed to spending money, start making sense.

The term ‘saving for the future’ has been overrated, and in this article, we are going to cover four things you should remember before you blindly follow this sage advice.

1.  Money is not an investment

Money in the bank that is not earning you any return creates an expense in form of bank charges and service fees. When saving for the future, it is essential to take the next step in ensuring your money retains its value or even increases in value through investing.

It is important to remember that your investment should give you a good return that more than compensates for the loss of value over time.

A consistent return of 15% to 20% on your investments may sound desirable, but be aware that aggressively seeking attractive rates of return without reasonable skill or knowledge of investing can easily make you fall prey to Ponzi schemes.

2.  Maintain your position as a master of money

Given the discipline required to put money aside and leave it alone, you need to spend a good amount of time analyzing your finances. It also helps to have clear-cut times or places to handle financial issues, so it becomes a routine.

Being a master of money allows you to do things you really want to do, based on the confidence you get in determining how and when you spend your money. Working on your mindset and your relationship with money is always a good place to start.

3.  Be true to yourself and your family

It is all too easy to borrow money and convince your spouse and your children that you are better off than you actually are. Unfortunately, all you are doing is building a house of cards, which is bound to crumble.

If you are facing financial difficulties, do not attempt to hide this truth from your immediate family. This goes as far as being comfortable with talking about money with your spouse.

When your children are old enough, it helps to let them know that financial challenges exist, and they have to be able to think analytically to overcome them.

4.  Inflation is a potent foe of savings

Money typically loses value over time through inflation. It therefore goes to say $1,000 today is a lot more valuable than $1,000 dollars five years from now. If you save a fixed amount of money without earning any interest on it, you are losing money.

Over time, the money you have saved will prove to be worthless, as it will not command as much purchasing power as it once did.

Many people today are facing financial challenges because of making so many mistakes when it comes to handling money. A good education in personal finance can go a long way in helping correct some of those mistakes.

All this will only be of help if you can actually translate what you learn into meaningful action. If that has been your story, nothing is going to change until you make a move.

To get started, click here to download your copy of ‘The Money Management Blueprint’ and discover the simple yet little-known strategies that will help you manage your money with ease.

This easy-to-follow guide contains practical tips, strategies and ideas to help you start managing your money today, even if you are just a beginner. Download your copy today.