Systematic saving is a magical habit. Even small amounts can be the basis for considerable savings. Therefore, it is worth considering whether we do not have free resources that we can put aside in an appropriate manner. Thanks to this, we will be able to enjoy additional funds in the future.
Systematic saving is profitable
Due to the fact that our earnings are usually paid once, most of us set aside a certain amount of money with a monthly regularity and not once. This is where most of the savings come from. The problem is that while the earnings are regular, we don’t always manage to save money for the future. There are several reasons why you should ensure that this happens with more regularity.
Our financial security increases thanks to regularly built savings. We have additional funds at our disposal, which can be useful if, for example, we lose our job or if there are any larger, unexpected expenses. This comfort is much more valuable than the loss of several hundred zlotys, which must go to our savings account in a given month.
The compound ally of systematic savers is compound interest. Thanks to this known formula, interest becomes our capital over time and interest is also calculated on them in the future. Thanks to this, $ 100 set aside in March 2015 will be worth over $ 207 after 15 years , assuming that interest is calculated at a rate of 5% per annum . If every amount deposited every month generates interest in this way, our savings grow much faster than if we kept them at home or on a regular, interest-free personal account.
You cannot take advantage of the benefits of compound interest if you regularly put money in the sock. So where is it worth saving systematically? Savings accounts at banks are a practical solution for many clients. Their advantage is that they do not impose any minimum deposits, and also allow for free payment and withdrawal of savings. Their disadvantage is the limited interest rate. In March 2015, the best savings accounts on the market offer an interest rate of 3.5% – 4% per annum.
How do you choose a personal account for yourself?
Opening a bank deposit is also a good idea. We open a deposit for a specified amount and for a specified period of time. In the agreement, the bank declares when it will give us the money back and how much interest it will be – this is the case with the most popular deposits with fixed interest rates. If we decide on a deposit with a variable interest rate, the amount of interest will change depending on the level of interest rates. Although deposits do not provide a large profit, this method can be considered a profitable investment, especially for people who are unable to determine when they will need the deposited cash, as this form of short-term investment allows withdrawing capital at almost any time. , without the risk of suffering a loss. All you need to do is choose the best offer on the market that will ensure the highest return on your capital.
Systematic saving is also possible under investment funds. Bond funds as well as monetary and cash funds have a lower risk than equity funds, and some of them win with results on deposit rates in banks. Many open-ended investment funds also have low limits on first and subsequent payments (e.g. $ 50 – 100).
In summary, systematic saving allows you to secure our current finances as well. Thanks to the favorable mathematics (compound interest), small amounts turn into considerable capital over time.