Save or spend – which makes more sense?

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Date16/06/2016

It is clear that no extremeness is not good. Also talking about saving and spending, nor saving, nor spending, if it is excessive, does not lead to anything good. It is very important to find a balance between saving and spending.

Excessive spending can lead to situation when it is impossible to make all of mandatory payments, for example, pay for utilities, rent, loan, telecommunications, television, internet, fuel, groceries, medications, as well as for other significant things. Everyone of us knows what can happen when some of these payments are not done. For example, if we do not pay for utilities, providers of these services can easily cut down electricity, water or heating. If we do not make loan payments, we damage our credit history which can lead to debt collection or, even worse, litigation. If we do not go to the doctor and do not buy necessary medications, we damage our health. In one word, consequences can be different, but all of them are unpleasant. You have to worry about your spending habits and to restrict yourself when you excessively spend your money for secondary purposes, for example, for entertainments, clothes or vacations. If money is spend only for primary purposes and it is always insufficient, you have to seriously think about searching of additional resources of income.

Interesting, but excessive saving is also bad, because usually everyone thinks that the more money, the better. We will not be talking about normal saving, but about excessive and covetous saving. Of course, it is absolutely fine and even recommended to save money in normal range, namely, to create a reserve fund which can be used for unpredicted and unplanned situations or, conversely, for planned situations, for example, vacation or car. If you constantly are saving the money, you are avoiding a necessity for one costly service – the loan which helps you to get some product or service, thereby satisfying your needs and wants immediately.

In the case when a person only earns the money but never and nowhere spends it, a logical question has to be asked – why do you earn this money if you do not spend it to any, even personal, purposes? A sense of money hides in a fact that money is a mean which is meant for satisfaction of some need or desire. If it is not done, a sense of money disappears – it becomes a piece of paper that collects a dust at home. If money is being saved at home, there is a risk that it can be stolen. If money is being saved in electronic form, there is a risk that, losing your electronic payment card or the access to your bank account, you will lose the access to your savings. Of course, this problem can be easily solved, but the fact that the access can be lost for some time is the fact that can cause some inconveniences. Also electronic money can be stolen, especially nowadays, when there are a lot of different hackers. You have to take it into account, choosing where to save your money.

Money has to be used – it has to be invested or deposited. It is possible to invest your money in different products, properties as well as in different accounts and funds. You can read more about other types of investments and deposits in other resources of information. A sense of investment and deposit hides in profiting that returns to a person after some period of time. For example, the money that is invested in a property returns to a person when this property is sold, the money that is deposited in a retirement account returns to a person when it retires, but the money that is deposited in a saving account can be returned in any moment. It is recommended to inquire about investment and deposit possibilities that will reduce an excess savings as well as expenses, as during a period of time passive income will boost, reducing a difference between income and expenses.