Wondering why your money isn’t growing? Here are a bunch of reasons why. Read on to know more!
Who doesn’t want their bank account balance to grow? We all do, right? However, if you’re wondering why your money isn’t growing, maybe you’re doing something wrong. Most of the time we don’t even realise that small mistakes coupled with our carelessness can affect our money in a negative way.
Money may be the root of all evil, but it can certainly bring you happiness by helping you achieve your goals. Whether you’re looking to buy your dream house, go on a vacation or buy your dream car, with an empty bank account you can kiss those plans goodbye.
If you’ve invested money, but have concerns about your finances stagnating rather than growing, then that could be down to the risks you’re either taking or not taking with your money.
Regardless of what you’re experiencing with your money at the moment, here are some surprisingly simple reasons your money isn’t showing any signs of growth:
Poor financial planning
You can’t expect your money to grow unless you come up with a solid financial plan. This involves making a list of your immediate priorities and focusing on them instead of spending on things that aren’t of importance right now.
While it may be hard to cut down on expenses and formulate budgets in the beginning, focusing on important things that need your attention, like clearing your debts for example, can go a long way towards increasing your savings over time.
Additional Reading: Financial Planning Ideas To Make Your Money Grow
Did you know achieving your investment goals depends on these three stages?
- Your investment amount
- Actual returns generated by the investment
- Investment term
The amount you receive on maturity depends on these factors. You need to research well before investing so that you can see the returns you expect. Many investors look for quick returns over a short period of time, but end up disappointed when their returns don’t match their expectations.
Remember, if you’re looking for good returns, it is advisable to stay invested for a longer time period rather than a shorter one.
Additional Reading: How To Get Your Investment Strategy Spot On
Every investment comes with certain risks and no investment can be considered absolutely safe. Don’t always consider your capital ‘safe’ because inflation can play a big part in reducing the value of money.
Choose investments wisely so that you can minimise your losses. Want to beat market volatility with equity investments? Invest with Systematic Investment Plans.
Additional Reading: Best Investments For The Next Ten Years
You haven’t set any money goals
Setting financial goals always helps since you have a target in mind, which you can continuously strive to achieve. For instance, if your goal is to save Rs. 10 lakhs over the next 5 years, you have a clear-cut figure in mind that you can focus on.
Based on that, you can budget yourself accordingly and seek investment avenues that can help you achieve your goal within the timeframe you have set for yourself.
All it takes is focus and discipline on your part, and you may even exceed your expectations sooner than you think.
Additional Reading: How To Meet Your Goals With Mutual Funds
You’re not taking enough risks
Investing can be slightly risky, but merely putting your money in a Savings Account is not going to help you grow your money. If you want to see your money grow, you have to be prepared to take calculated risks every now and then.
However, this doesn’t mean that you need to invest in every risky stock out there. Instead of investing impulsively, understand your financial obligations and invest accordingly. If you can afford to take on slightly riskier investments that may fetch you higher returns, then by all means, go for it.
Additional Reading: 5 Risks You Should Be Aware Of As An Investor
You’re not consulting the right people
Like we mentioned before, merely putting your money in a Savings Account won’t make your money grow. You’ll have to step out of your comfort zone to make things happen for yourself.
If you’re not aware of the market and investment options to suit your needs, ask an expert. Asking an expert for help is way better than investing in the wrong places and ruing your mistakes later.
Additional Reading: Now Choose Your Financial Advisor Without Any Hassles
You’re not setting limits on your expenses
Are you one of those people who starts swiping their Credit Card left, right and centre as soon as they receive their salary? Well, there’s no way your money is going to grow if you spend like there’s no tomorrow.
Unless you set an upper limit on your monthly expenses, you’ll never be able to save enough. As soon as you receive your salary, you need to be strict with yourself and manage it well. This will help you save at least 20 per cent of your salary every month while meeting all your necessary expenses as well.
Additional Reading: The Shocking Results From A Credit Card Survey
Excessive Credit Card interest
Paying excessive Credit Card interest is one of the most common reasons why people find it hard to increase their savings. If you rack up massive Credit Card debt, then you’re going to find yourself paying huge amounts of interest in addition to the amount you owe.
Make sure you limit your spending to just 30% of your Credit Card limit so that you will have no trouble paying it off in full every month. This will help you stay on top of your finances while avoiding exorbitant interest rates.
Additional Reading: Tips To Deal With Credit Card Debt
You’ve probably figured by now why your money isn’t growing. If you have, you know exactly what you need to do to change your financial situation.