Ever since the global financial crisis of 2008, it has become more important for households to protect savings and plan for the future.  This means that we must manage our money in ways that are efficient and able to maximize the potential to accumulate savings over time.  As with most things, the accumulation of wealth is a slow process that requires patience.  But if you are able to manage your finances in conjunction with an accurate assessment of the time factors involved in reaching your savings goals, the entire process is fairly straightforward.

Savings Outlook Over Time

The first step in managing your time in conjunction with your money can require you to establish a savings outlook several years in advance.  Do you have a large family, or is your household time still small?  Will you need to plan a college fund for your children, or are there any significant medical expenses that will need to be covered in the near future?  These are all factors that can change the outlook for how you manage your time and money today.

This is another reason to explain why age is such an important factor when you are managing your finances.  For example, a single person in their 30s is going to have very different financial needs when compared to someone in their 50s with college-age children, or even a person in their 60s that is starting to plan for retirement.  Your individual circumstances are going to change depending on your specific phase in life.  This ultimately means that your current financial plan will change over time in ways that will require you to reassess the needs that are most important and then to allocate as many resources as possible in maximizing the effectiveness of your funds.

Money Saved, Is Real Money Earned

We have all heard the famous Benjamin Franklin quote that discusses how ‘a penny saved, is a penny earned.’  There is a great deal of truth in this, as you can literally increase your savings and wealth depending on how you deposit your hard-earned money.  For example, you can achieve the highest level of economic safety by simply putting your money in a bank account or savings bonds that guarantee a certain level of interest will accrue over time.  This higher level of security generally means that your real rates of return will be lower.  But if you are in the older stages of your financial lifetime, this added security can be highly valuable in its ability to help you to plan ahead over time.     

The other form of ‘earning money’ over time through saving is done using investment assets.  Common choices here include instruments like the S&P 500, Dow Jones Industrials, and the NASDAQ.  These are all collections of large companies that allow investors to take diversified stock positions in the market.  Each of these stock benchmarks has its own set of characteristics, so it is important to conduct research that is more in-depth before committing large sums of money.  

The advantage of these types of investments is that they are typically associated with annual returns of 10-15% and this can make them highly attractive growth vehicles if you are in your earlier years and you are looking for ways of building your savings over time.  In contrast, these investment methods might be less attractive for people nearing their retirement years, as there is reduced safety that comes with the potential for these larger investment gains

Money Management Apps

In our modern world, the digital age has given us many tools that can streamline the process of personal financial management.  With the use of money management apps, consumers can see how much they are spending and make determinations to change spending habits in ways that improve savings over time.  The best-reviewed money management apps include the BudgetTracker.com tools, which allow you to manage your finances in ways that enable you to stay out of debt and improve spending habits to maximize your disposable income levels.

It is absolutely critical to use tools like these when managing your finances because they give you a more objective view of your spending habits.   It can be very easy to make excessive purchases and then try to forget about the impact reckless spending can have on our ability to save over time.  But if you have the added help of a Budget Tracker, you will never forget about the purchases you have made as they will be included in your comprehensive money management plan you have set for the month.  

Reckless spending is the number one contributor to high levels of consumer debt, so it is important for all households to monitor their spending habits and avoid the massive compound interest burden that comes with growing levels of debt.  Luckily, most of these problems can be easily avoided with some simple planning, attention to detail, and a strong adherence to your spending schedule.  As always, it is an excellent idea to use a Budget Tracker in making these spending schedules so that you have an objective record of where your money is going at all times.  

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