How To Save More Money: 24 Best Money Saving Tips

If you’ve been adulting for some time now, then you’ve probably come to realize that building any kind of strong financial future isn’t about how much money you make; it’s about how much money you keep. Building wealth, then, is about how much of that money you can multiply. 

While the goal of this article is to stress the importance of saving, we’ll delve a little bit into the necessity of investing as well. 

How to become an investor and grow your assets is beyond the scope of this article, but it’s worth noting, and hopefully gives you the incentive you need to include investing as a topic of study in those 20- or 30-minute weekly sessions where you’re increasing your financial literacy on top of reviewing your budget.

A Budget Helps You Save More

While this title may be self-evident, it can be jarring to really take a look at the figures in our budget up close. 

How much we actually bring in versus what we think we do is one thing! We’re used to telling ourselves we make a certain salary or income every year, but when it comes down to it, what we take home after taxes and pension contributions is a lot smaller than what we actually think. 

We may wind up living a $50,000 a year lifestyle, when we actually pocket $35,000 net. On top of that, we may realize how we handle that $35,000 is less than stellar. For many of us, we may do a quick mental calculation and notice that what we bring home in net income can easily cover our actual expenses, but we may then be completely flabbergasted to realize, “What the heck happened to the rest of my money?” 

If you’re budgeting for the first time, you may find that going over your expenditures over the past year is one of the toughest exercises you’ll ever do in trying to improve your financial health. 

This is where we begin to realize where all the money has gone, and in remembering some of our purchases, we can begin to realize either the waste or the poor or neglectful decisions we’ve made. This is usually the part where people stop and maybe give up on themselves altogether. Be ready for this part, and don’t give up.

1. Stay Organized

This may sound a lot like your mom imploring you to clean your room, but you know that it’s a lot easier to dive into your financial paperwork when you know where everything is and how you’ll use it. 

Every budgeting style is different, as we’ve talked about already, but as long as you can stay on top of exactly where your money is coming from, and where it’s going, then you can consider yourself organized. In this way, you can now prioritize saving because you’ll know exactly what’s available to you and when, and you can decide where you’d like your money to stay.

2. Stay Focused

An actual written game plan is easier to follow than our own vague ideas about where we stand with our money. Have you made any realizations about how you’re spending your money so far? Then, you probably know that some on-the- fly mental math isn’t the most reliable way to monitor your money. 

When things are written down so that we can see what’s actually happening, we measure our situation more accurately, as well as give ourselves a more realistic timeframe as to when we can do what we actually want to do. This makes our goals more real and more tangible.

3. Stay Aware

Budgeting keeps you aware as to the holes in your spending habits, as well as the bad behaviors you may have picked up without even realizing. Saving isn’t just about squirreling your money away, it’s about getting a handle on those wasteful habits and impulses we talked about. 

Staying aware of why it is that you want to save and for what is a big part of the equation that we don’t think about often enough. In fact, you should be thinking about why you’re working for and saving your money every day. 

A budget will help evaluate your struggles so that you can take intentional steps to improve, but a reason for getting started in the first place will keep you taking those steps consistently even when it gets tough.

4. Stay Prepared

Saving will also keep you ready for the big things without worry or without scrambling to find the money at the last minute. Whatever emergencies or unplanned expenses come up, you can take care of them without breaking a sweat or ruining the budget. 

That’s what the budget is for—it’s not a self-evaluation that you either pass or fail every month. It’s a guide to get headed in the direction you want to go in life, and whenever life blows you off course, it can get you back on track.

Reduce Your Expenses

Saving where you know you already can is an important beginning. Many of us know that when it comes down to it, we have an extra few dollars that we can put away each month. We’ve just got to buckle down and do it. 

Coming to terms with the areas we’re being wasteful in is a study in discipline, but that’s why it’s so important that you know the reasons for your own motivation and desires. You know that these problems aren’t just going to fix themselves. You’ve been given some tools so far for getting on top of your budget and overspending. 

Let’s continue to pick up the momentum here. If you still feel strapped for cash after having taken care of your expenses, take a look at some of these money-saving avenues you can take. We’ll focus on the categories where the highest costs occur first—this is the most effective way of sinking your teeth into saving. 

Your housing, transportation, and food bills usually account for 60% of your total spending, so making wiser decisions in these areas can greatly determine how impactful your output is.

1. Housing

This is one category to think long and hard about before making any commitments. Housing is also not something that we have to feel an obligation to commit to. Not everyone wants to live in a big fancy home, and there are plenty of people who don’t want a home altogether. 

When making decisions in this area, make sure they are your decisions. Don’t be afraid to downgrade if you find you’re living in a home or even an area that’s out of your budget. Home ownership can often feel like a show of our status or just a belief that this is simply the next phase we have to take in life. 

However, making a decision to downgrade is no reason to feel like you’re not succeeding, and this decision doesn’t have to be permanent either! What if spending the next five to ten years in a cheaper residence than you’d initially decided on guarantees you enough savings to then spend the rest of your life in your dream home without being house-poor? 

Would it be worth it then? Remember those three to six months of “going without” for the sake of getting a jumpstart on your budgeting system and debt payment plan? You could try the same jumpstart for your entire lifestyle altogether.

This is definitely a bigger change than to simply cut out Netflix for the next little while, but if you’ve done the calculations and it makes sense to you, then consider the lifestyle you could have later because of those tough decisions you’ve made today. 

Renting might also be a more favorable living situation for your budgeting plan right now. When you’re not the owner of the property, you don’t necessarily have to consider all of the extra responsibilities that come with owning a home. 

Factors like taxes and home repair can be cut down considerably when you’re renting, and you’re not committed to your place. If you find yet another living situation that accommodates your family’s budget even better, then you can make the move more easily than if you owned the space you lived in. 

You can also consider ideas like finding a roommate or renting a portion of your home. Because housing is such a big part of most anyone’s budget, it’s really important to prioritize your needs over wants. In fact, you may find that you’ll have to forego your current wants altogether in order to accommodate your wants of the future. 

Consider your income and the fact that all budget items that are housing-related should be within one third of your income. This includes utilities (which we’ll get to a bit later), property taxes, the actual rent or mortgage balance, homeowner’s insurance, etc. Does 30% of your take-home pay cover all of these? 

Here, you’ll have to consider how flexible your living situation is versus how much of a ceiling you have on your income. Is it easier to have your lifestyle accommodate your income, or is it easier to have your income accommodate your lifestyle? This may be a tough pill to swallow, but for most of us the answer is the former.

2. Transportation

This is another area in which we really have to take a harsh look at ourselves in terms of what we want versus what we actually need. Cars begin to lose their value as soon as you drive them off the lot and take them home, and it continues to quickly diminish in value year after year. 

This is one category that we can’t think of as an asset, and making big purchases in this area without justified cause will do a lot of damage to our budget and the overall achievement of our ultimate goals. 

Avoid leasing or financing your car—buy it cash where you can, and commit to keeping it for a long time. That being said, this is another purchase you should take some time with making, avoiding the mentality of upgrading every two or three years. 

Go for something fuel-efficient as well, so that way you’ll be making some gas savings on an on-going basis (not to mention the part you’re doing in helping the environment). We can all easily fall into the trap of financing a car we can’t actually afford, lured by the new and the shiny, and by the fact that we can impress our coworkers a little bit when we pull up to work in the morning. 

However, think of the rule we have about housing costs remaining below one thirds of your income. You may have financed a $30,000 car this year to fit within your monthly budget costs, but consider your annual income, and the fact that your new car is taking up $30,000 worth of space in it! Do you want the next year or so of hours you spend at your job to be solely dedicated to your car?

3. Food 

Most of us can admit (especially those in the generations of Millenials, Gen Z, and younger) that a good chunk of the budget is dedicated to food. When we do an autopsy of our spending so to speak, we’re all of us usually very surprised to realize how much food actually costs. 

Consider using UberEats: Besides the actual meal, there’s the fee for using the app as well as the tip or any service fees that apply. If the restaurant you want to order from is close by, you may as well walk (at least, you’ll have earned your dinner by burning off some calories first). That being said, limit eating out as you already well know you should be doing. 

Going out to dinner or lunch should be a treat and not a given. Making your own food and especially bringing your own coffee from home can easily help you find upwards of $100 at the end of the month.

Keep track of your grocery lists and try to buy items that you know you’ll need a lot of and frequently in bulk wherever you can like we mentioned before. Your food bill is the most malleable expense out of the three major expenses, so take advantage of this where you can. 

This doesn’t mean you have to starve yourself, but it does take a lot of time, planning ahead, and resistance. A few things you can do to help quell the temptations are to make sure you’re well satiated before going out to do your groceries! 

Most of us know that shopping while we’re hungry is really asking for trouble, especially if we’re not used to disciplining ourselves. Be just as strict with your timing when headed to grocery stores as you would be with your list. Maybe you find that you simply want to get your items and get moving when there’s a crowd in the store. 

If so, that actually might be the ideal time to do your shopping for the sake of your budget. Maybe you know exactly when your favorite stores set up their sampling booths; that might be a time slot to avoid if you know you can be easily persuaded into adding these sampled products into your cart. 

Budgeting your food could also be an opportunity to pursue your health goals. Staving off some of your treats and staying focused on a specific meal plan can really go hand in hand with creating a specific budget that you’ll be motivated to actually stick to. You’ll also come to realize how much waste we have in the rest of our lives too, not just our budgets. 

Think of all of the food you have to throw out on a regular basis, and then try to imagine what that pile of food might look like at the end of the year in cash! 

Consider those meal plans, and how they might actually help you to get a better idea of how much food you actually need to buy. Be open to dating and freezing things, and before sitting down to do your grocery list, you can take a look at your freezer to see how much you actually have available to eat.

4. Auto and Home Insurance

Auto and home insurance is a competitive industry, so it’s easy enough to get a quote and compare what you currently have to something potentially better. You can also look into the different kinds of bundles there are available, not just with auto and home, but also items like home security and the like. 

If you’re already paying for these kinds of things, like a bundle or buying in bulk, could lower your overall price every month. One other option you might consider would be to actually raise your deductible which would lower your monthly premiums. 

Your deductible has to do with how much you’d be contributing to damages paid when it comes to submitting a claim. The more you can contribute along with the insurance company come claim time, the less you’ll have to pay on a monthly basis towards premiums. 

This may seem like it defeats the purpose of having insurance altogether, and it may not be suitable for everyone, so here’s where you’d have to do a bit of calculating. If you increase your deductible from $200–$500, for example, this could be a monthly savings of 15%–30%. 

Making the extra effort of putting away an extra $300-400 into your emergency fund might be worth the freed up cash you’d then be saving on premiums every month. Again, you’d have to take a look at your budget and income, the value of your car were something to happen to it, and what you’re looking to save towards your goals on a regular basis.

5. Communications

The way we communicate is always changing and being upgraded, making this another highly competitive industry which means more potential savings for you. We hardly use landlines anymore, and many of us forego long distance bundles nowadays in favor of using apps like WhatsApp or Telegram. 

Data is usually what you want to concern yourself with when it comes to communication, and there are so many deals to be had in this arena. 

On the other hand, you want to watch out for unnecessary upgrades in data usage. While there may be a special deal going on for you to upgrade your data limit for just a couple of bucks extra, you’ve got to really consider whether you or another family member can actually use it well. 

You may find yourself a few months down the line with a bunch of data you don’t use, but when you try to downgrade, there are no bundles that justify the cost. You wind up with a bunch of data you don’t need, and the bill to match.

6. Clothing

Fashion is another category similar to transportation. That is, it’s more about social appearance rather than about any real value it brings to our lifestyle. 

While we may want to use fashion for more than just its functionality but rather to express ourselves in a creative way, we don’t need name brands to do it. Consider shopping at thrift stores or having a clothes exchange among your friends. 

If you really are a creative type, and you have the time, you might find it fun to express yourself through your clothes by trying your hand out at DIY. Can you take these second-hand pieces and make them your own? 

Most people don’t actually use even half of their wardrobe on a regular basis (more waste!), so this may be another opportunity to overhaul your lifestyle by cleaning out your closet and drawers to be more purposeful with what you wear and how you show up in the world.

7. Utilities

Remember that utilities factor into housing costs and should be included in that 33% of your take-home income. That being said, consider how you use things like heating. Consider getting a bit handy, and take a look at your windows or anywhere else in the house that could be unsuspectingly leaking heat. 

You can put in caulking or even plastic film around your windows in the winter time to be more energy efficient. An energy efficient home, while requiring a bit more effort and maybe even dollars in the beginning, also becomes a money efficient home overtime. 

Keep your water heater at 120°F and be sure to lower your thermostat when you’re out of the house or away for an extended period of time. You might be able to set it on a timer to lower while you’re at work or even at night while you’re asleep. A cool room actually promotes better sleep, so while you’re budgeting, you’re also doing a great number of good things for your health!

8. Entertainment

We’ve already talked about the benefits of holding off on your leisure and entertainment expenses at least for a certain period of time, or how you can allocate any rewards and cash back programs to your leisure and entertainment category. 

Sometimes, however, this category is simply a matter of having enough discipline to do what’s required in order to later on have the things you truly desire. Like the landline, most people don’t find the need for cable TV anymore. If you have Netflix, Amazon Prime, or even Disney+, you really should consider letting go of any other TV entertainment. 

While you may decide to cut all of these expenses off for a time, you might want to consider visiting your local library (remember that place!?). If you still have a library card, you might be able to rent out movies for free depending on their programs as well as borrow your books for free. 

You can also check out websites like Entertainment.com that offer coupons for you to save on various items for travelling, dining out, etc. If you’re able to pair up those coupons with the rewards or cash back you get with your credit cards, you might find you get your entertainment and leisure category practically for free.

Other Saving Tips

You can never get enough saving tips, and spending a bit of time every week on your financial literacy can go a long way towards optimizing the savings you could have. Finances comprises so many nooks and crannies that you could take advantage of; you’ve just got to know where to go and what to look for.

1. Reduce Your Tax Burden

This isn’t about avoiding your taxes, of course, but about using all of the benefits the government itself has to offer in terms of tax rebates. An optimized tax strategy can help lighten the burden so that you can bring home more of your own money by the end of the year. That being said, what’s your tax bracket

Do you know the difference between your marginal tax rate and your average tax rate? Do you know of all of the expenses you can begin to deduct if you were a self-employed worker rather than an employee? Self-employed people as well as business owners have way more opportunities to be tax-efficient than employees do. 

Have you ever thought of going into business for yourself, or to be a freelancer? Likewise, do you know of all of the deductions and tax credits that are available to you in your given situation? 

You may think that your accountant would have told you about everything you’re entitled to, but oftentimes they don’t always think to ask us about the things in our lives that we don’t even know are deductible or creditworthy! 

How do you know what questions to ask, if you’re not well versed in this area? Every country, state, province, or territory is different, so you’re going to have to spend some of the time designated to financial literacy digging.

2. Spend a Little Now, Save a Lot Later

Have you ever heard the saying that preventative care is the best type of medicine? That is, the more you take care of yourself now, the less time and resources you’ll have to have to take care of yourself later. Those resources apply to your money as well. Regular maintenance of your health, your teeth, even your car or house, will mean you’ll less likely have to deal with the kind of severe damage later that could be extremely costly. 

Spending some dollars to get the right kind of service and quality you need can be better than looking for the cheapest deal. Again, you’ll have to do a bit of calculating and revising of what’s important, valuable, and most urgent to you.

3. Fitness

You don’t need to go to fancy a gym or buy extensive diet programs in order to get fit and stay healthy. If you’re committing time to increasing your financial literacy every week, you might want to allocate some time to increasing your knowledge around health as well. 

This way, you can go about learning some basics so that you don’t have to hire a trainer or nutritionist. Health can be as simple as moving more and eating less, and let’s face it: Most of our health issues would improve if we simply ate more of those darned veggies every day. 

Prioritize your health; you might find that this means, in fact, hiring some help in the name of that aforementioned preventative medicine. 

Just be honest with yourself. If you’ve had that gym membership for a while without using it, then having that extra expense really isn’t enough motivation for you to get healthy, so you’d just be wasting money.

Increase Your Income

You don’t need to be told that you need more money, especially if you’ve done everything right with your budget and you still find yourself struggling. Just an extra $500 a month would be a game-changer for most folks nowadays. So, what can you do?

1. Sell Your Stuff

Okay, so you don’t have to sell all of your stuff, but hopefully that section on saving where your clothes are concerned put you on to the fact that we all have a lot of stuff. Do you work from home or are you able to walk to work? 

Then, maybe your family only needs one car, and you can sell the second. Do your parents still have an attic full of your old things? You might find some big ticket items that you don’t even realize are big tickets! Do a bit of scavenging, and while you may not find your fortune, you might find enough to create a small emergency fund or the beginnings of a short-term savings plan.

2. The Side Hustle

This has become more of a common phrase than ever before; it seems like everyone has a side hustle. The era of the entrepreneur is rising, and is a great opportunity to not only make a fair bit of extra income, but to also take advantage of those tax efficiency strategies that the self-employed have always taken advantage of. 

Do a bit of search on what you might be able to do, like dog- walking or babysitting, writing or photography. Look for opportunities you enjoy, so that the extra hours spent working don’t actually feel like work.

3. Your Job

Look to take extra shifts if you’re an hourly worker. Determine ahead of time how many extra hours you’re willing to do and when, so that you budget your time in a way that serves you rather than overworks you. 

Then, make yourself available to your coworkers; let them know that you’re the go-to person to ask if they need someone to cover for them in case of an emergency. How about spending some of that extra time you now have, if you’re not indulging in leisure and entertainment for the next little while, on gaining a new skill? 

Look for certifications you can pursue in your spare time that could help you advance at work. Likewise, if you know what you’re worth and what value you bring to the company, ask for a raise. This can feel like a stressful situation for many, but if you know you’ve earned what you’re asking for, you should feel confident in the asking. 

Do your research on what someone in your position should be making and why, and make it clear to your boss that you have in fact delivered or showed initiative in your position. Also, don’t be afraid to leave if you’re not being given the opportunities you rightfully deserve. 

This is your life, and just like you shouldn’t feel ashamed to downsize your housing, you shouldn’t be afraid to upsize how you make your living. This could actually be your opportunity to go into business for yourself. 

Live Within Your Means

To live within your means goes without saying. However, it can be extremely difficult to do, especially if we’re used to living in a certain way with specific comforts. Suffice to say, here are a few tips to help ease the pains of this kind of transition.

1. Beat Your Impulses

With any kind of impulsive purchase or splurge you find yourself tempted to make, commit to asking yourself a couple of these questions before you make your way to the cash counter. Can I wait another 24 hours before buying this item to see how I feel about it in the morning? 

How many hours of work would I have to do in order to pay for this item (and consider the hours put in after tax dollars)? Talking to yourself in this manner is the beginning of cultivating a healthy relationship with work and money. 

You’ll have less impulse buys, as well as harbor a lot less regret. Know what your triggers are and avoid those things or areas that’ll exploit your weaknesses. Do you usually like to stop at the ice cream shop on your way home? Try taking a different route. Do you often engage in retail therapy? Try doing some yoga instead; you’ll be saving your wallet and promoting your health.

2. Stick to the Plan

This has also been mentioned a couple of times, and you already know the importance of actually sticking to the plan, but it’s one thing to create a budget and quite another to actually commit it. 

Committing to your lists and spreadsheets means challenging yourself to spend in a certain way for a little way. It means bringing the exact amount of cash you need for the grocery run, and leaving your credit card at home. 

Committing means checking your supplies to make sure you don’t already have what it is that you need, and being honest when you ask yourself, “Do I really need that?” Don’t look for sales if they’re not going to help you spend less. 

We often get caught up in the fact that something we usually buy is cheaper than usual without paying attention to the overall final cost on the receipt. 

Unsubscribe from email lists or newsletters that are constantly promoting new deals and the like. There may be a good deal or even a new opportunity, but if they’re not in line with your goals and intentions right now, they may very well be distractions rather than helpful.

3. Keep Reminders

Finally, keep reminders in your car or in your wallet of why you’re doing all of this in the first place. Like your vision board, you can get little card laminating pouches to create a small sign that you can keep in your wallet next to your debit or credit card. 

It can have a picture of your goal on it, or it could be an affirmation to encourage you. You can place an ornament around your rearview mirror that symbolizes a place you’re saving up to travel to. Whatever helps remind you of your goals, especially right before you’re about to spend.

When you do things a little differently, your brain will start to register that things are indeed different this time around. You’ll be more susceptible to picking up clues or ideas that’ll help move you closer to your goal.

Don’t Just Save—Invest

With all of these savings, you need to learn where to put those extra dollars now. It’s simply not enough to hide your money under your mattress. You need to invest your money if you want to build wealth and someday become financially free.

1. Why Do You Need to Invest?

The consistently rising cost of living is reason enough to invest; that mattress just simply isn’t enough if you want your money to maintain its value. 

Consider the fact that inflation rises at an average rate of 3% every year, so if your investments aren’t seeing an annual return of at least 3%, then your money is losing value every year. Remember those times when we could fill up our car tank or even our grocery cart with a $20 bill? 

This is a laughable idea now, but when you think of how your salary might not have even kept up with inflation, this is an increasingly severe matter to contend with. We have to find a way to increase our own value year after year, while making sure the money we’ve already earned can continue to provide for our lifestyle. Properly investing your money is the only way to do this.

2. What Kind of Investor Are You?

If you’ve just gotten started with budgeting, you’re probably already feeling overwhelmed at the thought of also having to become an investor on top of it. Rest assured, however, that investing your money has every bit to do with you than it does with what you invest in. 

There is no stock or bond, no financial product out there that can outwork your bad habits! Succeeding financially will largely depend on your stick-to-itiveness whether that’s with your budget or investment portfolio. 

Knowing what you want, how much it’ll cost, and how long you have before you need it are going to be foundational questions to answer to discern what type of investor you are. Your risk aversion also matters, but hopefully the more you’ll learn, the less adverse you’ll be, especially if you’re younger. What does ‘risky’ truly mean in regards to investing? 

Why are so many people afraid of investing anyway? Let’s take a look at just some investing basics in the next section, so that you can better determine how you’d like your money to work for you.

3. The What, Where, and How of Investing

​​Investing is an entire series of books in and of itself, so let’s start off by saying that mastering the formula of investing should go on your list of study in your weekly financial literacy time slot. In fact, it should be one of your priority topics alongside tax efficiency. 

With that being said, some of the basics for investing the right way include knowing what financial products to invest in and for what purposes, and knowing how to use these financial products properly. 

There are various kinds of financial products to invest in, and you could easily find thousands of different options to consider. What you want to keep in mind, however, is your rate of return. Remember when we talked about inflation steadily growing each year at an average rate of 3%? 

You want to make sure that your rate of return at least matches that in order to just maintain your dollar’s value. In other words, you could have easily bought a week’s worth of groceries for $50 back in the day, but today that same week’s worth costs $150. 

Now, if you want to actually have your money grow in order to create enough wealth so that you can retire one day, you’re going to have to do a lot better than just keeping up with inflation. Investing is all about compounding interest: The higher your rate of return, the faster your money grows in value, of course, but that also means the less money that actually comes out of your pocket. 

That is to say, if you wanted to save up $1 million with a rate of return of 3%, for example, you’d have to cough up a lot more money on a monthly basis to reach that figure than you would have to if you had a 9% rate of return.

This isn’t to say that you can find a guaranteed rate of return of 3% or 9% somewhere. This is just an example of what your entire investment portfolio might, on average, do over a certain period of time. 

The idea here is that if you’re looking to make a big return, then you need a high rate of return, but you’d also need time. The younger you start, the less money also comes out of pocket. If you start saving in your 20s for that $1 million, then you might only need to squirrel away $100 a month, whereas someone in their 40s might have to find $1,000 in order to make it! That’s a world of difference simply because someone chose to wait. 

So, these fancy rates of return are great, but how can you possibly find a 9% rate of return, and isn’t that risky anyway? If you’re thinking that rates of return higher than 2%–3% are impossible, then you’ve probably looked no further into investing than at your bank. Banks are mostly occupied with selling the general public financial products like bonds. 

They can offer better, but they usually reserve those kinds of offers and that kind of service for people who already have a lot of assets, and they don’t really ask questions beyond whether or not you’re a risky or safe investor. What it means to be ‘risky,’ really, is that you’re after getting aggressive rates of return, and that does literally come with its ups and downs. 

The stock market is constantly going up and down based on what the economy is doing—which companies are being bought out, which ones are going public or bankrupt, etc. Of course, there are ups and downs that we can’t predict. No one could have predicted the success of Facebook, for example, but those that got in on the ground floor are quite wealthy today. 

In investing, you shouldn’t feel the obligation to stress yourself looking for the next Apple or Tesla. All you have to do is make sure you put your fair share in, getting a small piece of every pie, so that when things go great, you get your fair share of pie, and when things go badly, your small piece doesn’t affect the rest of your portfolio too badly. 

This is what’s called diversification, and it’s extremely important. You want to diversify between types of investments to begin with. Getting your fair share of bonds is a good idea, even though they alone will never make you wealthy. 

They will, however, keep your capital stable and safe in times when the stock market is rocky. You do want to get products like stocks, so that you can get some of that aggressivity in your portfolio.

This is how you’ll build wealth and balance out those bonds. There are all kinds of other things to invest in, which we won’t go into detail as that’s outside the scope of this article, but you should know that you need a bit of everything. 

To continue on the note of diversification, you should not only diversify between products like stocks and bonds, you should also diversify between risks. For example, it’s not enough to simply divide up the stocks and bonds in your portfolio 50/50, because stocks can easily be two or three times riskier than bonds. 

If something were to happen to this 50/50 portfolio, it’s actually not 50% of your portfolio that’s affected; it’s more like 60%–75%! It’s not to say that your portfolio should only be made up of stocks and bonds. You actually should look into investment opportunities like mutual funds or index funds that can include income or money market funds, or equity funds also. 

The point is that you get enough of the right financial products, diversified between risk, as well as diversified between country and industry, so that you lower the hits to your portfolio in a market downturn. 

This is how you protect yourself against risk, not by finding and buying the one magical product, and neither by only keeping bonds, but by getting a bit of everything. You don’t have to have a lot of money to get started; in fact, you can start investing in a mutual funds portfolio for as little as $25 a month. 

The next key is to be constant and consistent—you’ll make steady gains by spending time in the market over the long-term, not by trying to time the market in the short-term like a day trader does.

When there’s a downturn in the market, keep investing the same amount (in fact, more if you can manage it), because you’ll be adding more units to your portfolio than usual in a downturn. Prices are lower than usual, right? 

That means more units for the same amount of money. Do you know what’ll happen when the market inevitably goes back up again? You’ll sell your cheaply bought units at a higher price, because prices are going up. 

You’ve made a profit. A lot of people struggle with money and how to properly invest, and the irony of it all is that what’s termed ‘risky’ or a “bad market” is actually good for the long-term investor. You just need to have a bit of knowledge applied consistently over a long period of time. 

This is where working with a financial advisor might come in handy. Many people nowadays get into commission-free trading for themselves, and that can be great if you’re confident and competent in the knowledge you have. 

If, however, this is all new to you, and you have no idea how to trade, you might want to seek advice in which case the commission you pay would be worth it. Consider this: Do you think you can make $1 million on your own? If not, how much of that $1 million would you be willing to pay in commissions to the person who can help you build it? 

That’s your place to start if you’re wondering if working with a professional is worth it. The commission fee doesn’t have to be large either and can oftentimes be negotiable. That being said, how do you pick the right professional for you? Are you confident that they can get you to your $1 million? Are they transparent with you about how they get paid? Do they have the heart of a teacher? 

All great advisors are concerned with how much their clients understand what it is they’re doing with their own money. If your advisor asks you a lot of questions, follows up with you on what you’ve both discussed and committed to, and if you know more about your own money than you did when you first met this person, then you’ve got yourself an excellent advisor. 

Keep researching, keep trying, and stay committed to the end goal. This may be a lot of information, but you’re not going to accidentally stumble upon becoming a millionaire one day. This is going to take intention, commitment, and a willingness to keep working hard even if it seems like you’re getting nowhere. Keep your head up.

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