By working, we produce income. This has only two outlets: either it comes consumed to buy goods and services (incidentally, consumption includes all those household expenditure items such as costs related to the house, various bills and so on), or spared.
The money that is saved is used for many things, such as a carry out our projects, or to cope with unexpected events of life, or to support yourself when you get older and maybe your income drops because you no longer work. In general savings serve to create the possibility of consuming in the future, defending oneself from the uncertainties that constellate human life.
In times of severe crisis saving is getting harder and harder. However, we need to make an effort, perhaps giving up something ephemeral. Each of us, with an examination of conscience, knows what is really important and what is not in our flow of consumption.
As you know Advise Only offers "advice" of personal financeSo let's try to get practical. Let's consider the needs of one person of working age and let's see what they are the pillars on which to base your savings: those principals, that is, that anyone should create in order to "live peacefully".
1. A life insurance policy. A simple one, NOT an expensive and opaque unit-linked policy. You need a policy that protects against adversities that can affect health. Ideally, it covers you and, if you have it, your family against illness, injury, accidents and other misfortunes. I know that you feel like begging, but in these things it is good to be pragmatic and face reality.
Unlike RC Auto policies, which are very standardized and therefore available online, the life insurance policies they are obviously very personal, so you should consult various insurance companies and understand which policy best suits your needs, both in terms of risk coverage and costs.
2. Retirement savings. The traditional pension schemes (INPS for instance) are less and less able to ensure an adequate standard of living at the end of the working activity. So it pays to be cautious and create an additional wallet, which can be a pension fund category or corporate, or a dedicated wallet created by you (Advise Only offers two portfolios: Objective Retirement e CAP pension objective, both freely available on the site). The important thing is that you start saving. Beware of Costs: they are – unfortunately – the only certain component of the investment and, in the long term, they have a huge impact. To say, a difference of 0,50% in costs, on a capital of 30.000 euros in twenty years eats up about 7.000 euros!
3. The current account. Indispensable for managing current income and expenses. More than the interest rate on the account, mind the services that offers you, trying to limit costs as much as possible: cash machine, credit card, paying bills, free withdrawal from any counter of the banking system, a good online banking, including the possibility of buy and sell financial instruments, etc.
4. Medium-term investment. If you have something left over, even a little, you need to think about a medium-term investment that can serve the most disparate purposes: for example, create capital for their children(also for this noble purpose, Advise Only offers a portfolio:Goal children) or start a business, set aside a nest egg for an important trip (look Travel goal), or face thebuying a home.
I won't go into the details of the individual portfolios now, given that the investment ideas on the Advise Only site are very many (and free, an aspect not to be underestimated), I just want to say that savings can be accumulated slowly, with small investments made once every two months, every quarter or every six months. They are called "Accumulation plans” (or PAC) and you can make them by asking your bank for help or by yourself. It's worth it: they allow you to invest gradually, without worrying too much about choosing the "right moment" (which is very difficult, if not impossible) and in the end you will find yourself with a nest egg available for your goals.
