Before you read any of this, know how to pay yourself first.
This means that before you can save you have to pay for taxes and things that humans need to live.
What is saving and how does it help?
Saving is setting aside present income for future use. It helps you earn money for future purchases, on example being buying clothes for an event. It can also be put in to help you earn income if you deposit it in a financial institution. You getting the interest in return will help you earn money back. The longer you wait, the more you have.
What's the difference between saving and investing?
Investing requires you to take risks with your money and not being able to access it. It can also earn you more money than saving does. Saving has a certainty to earn you money over time.
Why should I save?
Saving helps you earn money for things that you want later in life. There are major things like retirement, college funds, or a down payment on a home remodeling project. There are also things that may not take a long time to save up for like a vacation, emergency fund, or a down payment for a car. There is a acronym for saving called A.C.T. (Affordable, Clear, Timely). This means that it is a goal you can reach, you know how you're going to save for it, and you know how long you have to reach it.
What are basic ways of saving?
Simple things like not eating out as much, using less electricity, not going grocery shopping so often, and many other things can help you save. This video gives you more and explains them.
What is interest?
Interest is money paid regularly at a particular rate for the use of money lent, or for delaying the repayment of a debt. There are two different kinds, simple and compound interest.
Simple InterestBased on only the principal amount of the loan.
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Compound InterestBased on both the principal amount and accumulated interest of the loan.
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What are some ways of earning by saving money?
Savings BondA savings bond is when you give the the U.S. Government a reasonable amount of money, and they pay it back to double over a certain amount of time. The lowest you can buy it for is $25. It is considered one of the safest ways to earn money since it is secured by the U.S. Government and the only way you could lose all of it is if the U.S. goes bankrupt, which it most likely will not.
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Savings AccountsSavings accounts are almost the same as savings bonds, The only difference is that you give a bank your money, and you get paid interest from it. The reason you get paid interest is because the bank uses your money and can use to for other transactions, but you will still be able to take it back out using checks. The only downside to that is that you are only allowed to use 6 checks a month. It is also very safe and can allow quick access to it in an emergency.
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