Once you have started using a budget for your household you will be creating leftover money to save and invest. The following information is designed as a basic plan to get you off to a good start on creating the wealth you want.
First let’s do a quick definition. Saving is holding leftover money. Leftover money is money you have not spent. You must hold this money in order to save it. If it gets spent it is no longer your savings.
Investing is putting your money in a form which has the potential or near certainty of increasing the amount you start with through interest, dividends or price increase.
The first form of saving is to take your leftover money, convert it to cash or some other valuable and tangible form and put it under your mattress. This is not recommended. You will not earn interest on money under a mattress! The goal of saving is to make your money work for you by earning interest, dividends or growing in some form or other.
So we need to do something with our savings other than hold the money at home. This is where risk comes in. Always a thought to keep in mind is that anytime you give your money to someone to hold for you, there is an element of risk that it will not be returned so you need to do your homework on who you are investing with.