A liaison officer wants to save and invest
Saving and investing are very closely linked. You need to save to have financial resources to invest and you need to determine what you want to achieve and when. It will help you to maintain your focus.
I figure you are a young person and I am encouraged by the fact that you want to save and invest even though your income is not strong. Not knowing what your responsibilities and goals are, the best I can do is offer general advice.
Let us look at savings first. I will repeat what I have said many times before: you need a budget to save effectively. Your budget will clearly identify all of your income and all of your expenditures. To make it work, you need to keep accurate records of both and to do a proper accounting of your financial activities at set intervals - weekly or monthly.
Budget templates are aplenty on the Internet and you can download a budget app to your smart device. These should make it easier to keep accurate records. Your budget should make it easier to control and monitor your spending.
Make saving a priority by choosing to make it the first item on the expenditure side of your budget. Determine if you want to save a set dollar amount or a percentage of your income. Break down your bigger goals into small ones: break down your annual savings goals into monthly savings goals.
THE NEXT STEP
Be clear about the goals you want to achieve. That will help you to determine how much to save and over what time. As much as you can, put your savings into an income-earning instrument. I know the rates are generally pitifully low.
It requires discipline to save but you can do it if you keep the end in view, but you should not be satisfied with just saving. Investing is the next step. This can also take time; you would be well advised to invest time in learning about the available instruments and knowing how and where to source them.
It is quite reasonable to start small and carefully. Avoid any instrument that you do not understand. Ask lots of questions of investment professionals to whom you relate. When your resources are limited, you will tend to be quite cautious and not to be generally inclined to buy more risky investments such as stocks.
Some new investors do buy small amounts of stock initially but you do not have to take that route. I believe in the usefulness of unit trusts and believe that they make a good starting point for new investors, and particularly those with limited financial resources, limited time to manage their investments and limited knowledge of investment instruments and processes but you can get bolder as time passes.
Investing does not have to be confined to the fancy investment instruments that you hear and read about. If you have the time and inclination, you can use your skills to earn income.
If you invest time in learning about investment matters, you put yourself in a position to reap good rewards, but be clear about your attitudes to money and the risks associated with investing activities. Be guided by your own needs, goals and temperament. Although it can be worthwhile to listen to others, make decisions that suit you.
You have started the process by asking. Keep asking and do all you can to learn about saving and investing. The Internet can be a good source but you should exercise caution as you draw on the vast resources it puts at your disposal. Read the financial sections of the newspapers and listen and watch financial programmes so you can get an appreciation of financial matters.
I wish you well.
n Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email firstname.lastname@example.org