Paying Down Debt: Part 3 – Building Savings

In our last article we addressed the critical step of credit reports and their benefit in beginning to pay down debt. The next important step we focus on is how to build savings.

The current economic situation has certainly put a damper on effort for starting a savings plan. When it appears that every check coming into the household is going to keeping the lights on how can one start saving? What efforts can be exercised to keep income for an emergency situation or for investing toward retirement?

Since the Great Depression and the current Great Recession the economy has placed a number of middle and lower class households into debt. Where income simply is evaporating and the next paycheck cannot come soon enough. However, there is a plan that can be accomplished to not only to become debt-free but also build a nest egg.

The media, articles and sources have expressed the current situation in a dismal outlook but there are also others who are profiting today. Therefore, there can be success in even difficult economic times when there is a plan that works for you.

In building savings there are key elements of which can be utilized as a resource for additional income. For many the answers to savings and building income have come from several sources. First there is acquiring additional education to get a better paying job, another is getting a second job, cutting expenses, or even using a hobby to make additional income. The one message that evolves from these examples and others is out of simple ideas additional income can be provided.

Going back to school or getting a degree is never a bad option. There are loans and grants available for accomplishing this goal. Along with employers who will pay for you to go to school and get ahead. The employer offering and opportunity for advancement in their company is also available upon completing your education. Companies have a need for educated employees in there higher paying positions. It is a sacrifice on time but there is a return for the time spent on acquiring additional education.

Everyone has a unique talent or experience of which can be an asset for others. It merely requires ambition and determination for success to come. If there is uncertainty, reading or getting answers can be a tremendous support group for your endeavor. Look into what you like to do outside your job and see if there is something there that others like that you do. It could be your next big income opportunity.

When you have discovered your source for additional income for your savings, the next step is much the same as in our previous article. Plan and set aside an amount for savings and make that a commitment every time you receive additional income. Focus on the goal to put away income for a better tomorrow. Decide on what percentage is necessary for that goal and make it part of your budget.

There are a number of different stable savings plans for which you can put your hard earned money into. In creating household savings there are several sources that are considered as options. Lets take a closer look at these options and learn more about them.

Some will approach the conventional savings account method as a solution. However, with rising taxes, account fees with banking institutions, and then the minimal or no return on these accounts, it can appears to be eliminated itself as an option. Do the math and look into your banking institutions savings account offering along with your existing bank account. If you find your bank account is not generating income or very little, chances are there is nothing from the bank account that will benefit a savings account. Next examine the saving account option with your bank. Look at the return percentage on depositing into the account. Often what you will find is the interest is going into state or federal taxes. If what appears as money going into a savings account is in reality going back into paying taxes then this is not a good option and no additional income will be attained from the account.

Others look at investment institutions their portfolios or investment prospectuses for creating a savings nest egg. Investment prospectuses are documents that tell you about the various investment funds, stock or bonds available in the account holding. There is a lot of information in these documents and some can certainly be overwhelming. But to know the honest opinion is to search the internet on that particular fund and see what the response has been from other investors. The last option on it is to discuss it with your financial advisor at your investment institution. After you have read the comments or reviews of other investors you will have first hand knowledge on the fund before your discuss it with your financial advisor. Keep in mind they are there to sell you a investment fund account and will not get into conversations providing their opinions, comments or discuss your findings. Do your homework, listen to them, but definitely get a second opinion on the fund.

The present situation of fines being imposed on major global investment groups
can certainly present a picture of putting investing in a fund on hold. Uncertainty and lack of confidence can then occur from these situations adding to the investment that already comes with its own set of risks.

Another option available to creating a savings account is precious metals. Precious metals come in several offerings and products. There are also quite a few sources on the market which provide you with options in securing the precious metal as an investment. The first step in their process is acquiring an account manager or account associate in opening an investment account. The initial uncertainty for the new investor is often resolved with the account associate. The approach for you is to acquire information from them, and also look into their information further and do your homework on them. Same as we discussed above with fund investment accounts.

Precious metals have a long established history and is a lucrative option for the prospective investor leading to stable returns and income. The return time period is similar to fund investments and can be a minimum 3 to 5 year investment period. The important factor in precious metals is seek historical information and analyze the data for any trends in bull (market rise) or bear (market decline) periods with the product. The market period in either trend is a key element to the product worth. Other factors like political or economic decisions can effect the product on market return.

There is one final option in the precious metal market and it is rare metal or coins. It is very important to note of the precious coin metal market there are standards and then there are coins that do not have them. The difference determining the value and the return on the investment. If the face value of the investment is being sold for less than what it appears then the actual value and potential for long term gain is also going to be less. It is always important to do the research and get the facts prior to making any investment decision.

Creating a savings plan does require time and income but can be a providing source of financial stability and also opportunity for retirement.

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