Savings plans allow you to gain interest over time, though the interest may be small the more constant you are with adding to your account, the greater for you in the future. For it to benefit you more you can label the account by future needs i.e. “House”, “Vehicle”, “Degree Program”, “Vacation” etc. These labels can help you better manage your monies. Another word of advice would be to have a Standing Order for these accounts, the average person will not remember every month to deposit, once there is a standing order that is no longer a worry.

A Forbes article called “5 Ways To Invest Your Money” is a perfect read to get you off on the right foot and lead you towards a very fruitful future. Let's discuss further the differences between Spending and investments.

The issue facing U.S. households

Sadly, there are a vast number of US citizens who will not fare well should another recession roll through the States. The financial crisis has sadly become an unsettling comfort zone for citizens over the past five or so years. Individuals are unaware of the future repercussions as a result of having severe debt.

The current generation has not received proper financial education, and as a result, individuals between the ages of 25 to 35 have relatively big outstanding credit card payments.

Parents and Grandparents of these individuals, in comparison, had much smaller balances during their age gap of 25-35 years, this goes to show that this generation does indeed have poor or no control over their spending habits.

Here's the difference between spending and investment

Often times people misuse the word “Investment” to ignore the very serious fact that they are spending bad money, ‘I’m buying that bag, It’s an investment in myself’, splurging “I’m going to spend $100 on lotto tickets”, that’s a gamble.

When an investment is made, the money is placed into product or service (purchases) which will benefit you in the future via profits made. This is true 99% of the time mainly because where you Invest determines your success. Mr. Warren Buffet is a prime example of choosing good investments, now remember you have to start small, don’t be confused by Mr.

Buffet’s current transactions, that’s a result of years in the business. His advice was simple, you search for something that is going to be in demand in the future, and that is determined by what you see happening now.

For example, spending on infrastructure is absolutely an investment. Roads carry people and cargo, free up traffic, and increase levels of productivity. Every dollar spent on new infrastructure pays off in the work in facilitates.

The video below explains in clear detail the differences between spending, Investing, and even speculating:

A general example is this; in the 90’s healthy eating and fitness training were not on the minds of the majority, however, as the numbers in heart attacks began to rise, the realization that in order to reverse or stop the damage required a change in diet and exercise habits.

Any business person with proper foresight would realize the demand for healthy foods, and different methods of exercise will rise and quickly. Now, in 2017 there are a wide array of diet plans, and exercise routines to suit the varying individuals worldwide and many business persons who’ve thrived financially because of investing in those ventures years ago.

Moving forward

First things first, remember to ask yourself, “Do I have any outstanding debts?”. Having outstanding payments would be a definite hindrance in moving forward with investing. Institutions will always be on the look-out for opportunities for them to retrieve what’s owed to them, there are legal means such as a ‘Judgement Lien’ where your bank account can be seized, and property can be seized and sold to satisfy the debt.

Be sure to be debt free before you begin to invest.

Before tossing your money around, one word, ‘Research’. With anything, to obtain the relevant information required to make the best decision requires thorough research. Opportunities are endless, deciding which is best for you is the reason for your research. However, before you begin viewing start-ups, simple investments like basic saving plans via your bank or trust companies are a good starting point, why, because you always need a backup plan.