To avoid money shortages, it helps to learn not only how to save but also how to distribute savings wisely. This perspective comes from Veniamin Stepanenko, a financial expert and founder of the W-Trading investment platform, who shared his thoughts with socialbites.ca about building a healthier relationship with money.
The expert offers practical guidance on how to cultivate a balanced approach to finances. His first recommendation is to create a clear picture of income and expenses.
He explains that understanding exactly how much is earned and where every dollar goes is the foundation of sound money management. By compiling a detailed list of income and expenditures, a person can determine a realistic monthly saving target and begin allocating funds accordingly.
Next comes building a financial safety cushion. A reserve fund acts as a shield against unexpected events, offering peace of mind during moments of financial stress.
Step-by-step, the advised guideline is to aim for a reserve that covers three to six months of regular expenses. Such a cushion provides a buffer while navigating unforeseen circumstances and reduces the impulse to incur debt when surprises arise.
While keeping money in a bank is a traditional and accessible way to establish reserve funds, there is also room to grow those savings through thoughtful investments. Opening a brokerage account can be a route to increase funds over time, provided risk tolerance aligns with the chosen strategy.
For beginners, conservative options are often the most prudent starting point. In particular, bonds offer relatively lower risk and can help newcomers learn investment fundamentals while preserving capital.
If the current income does not leave much room for saving, a careful review of spending is essential. The goal is to identify areas where expenditures push toward red ink and to address them with disciplined choices. Saving becomes easier when purchases align with necessity rather than impulse, and when consumers take advantage of cashback opportunities and eligible tax deductions to optimize their financial plan.
There is a reminder that not every investment idea is legitimate or well suited for every person. Caution is warranted, especially when schemes or prompts promise rapid, outsized returns. A prudent approach involves researching offers, seeking trusted advice, and avoiding schemes with unclear or dubious credentials. These cautions are echoed in broader discussions about consumer protection and investment literacy across markets.