Times are tough economically. Despite this, we need to be proactive, with our future in mind and that of our loved ones. Sure, it is not always easy to save significantly if you have no idea how and when the monthly bills are piling up. Still, we all know that we’ll eventually reap the benefits of saving if we’ll start now. Saving more means earning more from our hard-earned money.

What’s more, when you have extra cash, you can start investing for more leverage. For instance, you may invest in a condo to rent out for extra money that you can devote to savings.

If you are struggling to save and invest, here are some practical tips to help you with it.

How to invest your money wisely

1) Always look for the cheaper alternative

This doesn’t mean sacrificing the quality of the products and services you may need and want. Your first option is to determine whether you can get something for free. If not, can you get it for less, perhaps through negotiating or haggling or delaying the purchase until it goes on sale? Or, is there a substitute for it? Is an ex deal possible?

2) Embrace the concept of budgeting

Not all of us have a working budget. Some even loathe the idea, thinking that their lifestyles will be restrictive. What we didn’t know is that even millionaires are living on a budget. A budget is technically a spending plan, so you’d know where your money goes. With this also, you’d stick to establishing priorities and accomplishing your financial goals.

3) Pay bills on time

There are various consequences when you don’t pay your bills punctually. First, you need to pay more because they may incur penalties and interests. Second, your payment defaults are reflected in your credit score. Paying bills promptly helps you in going into more debt.

4) Avoid bad credit

Speaking of debt, there are good forms of credit, and then there are what we call bad credit. A perfect example is opening a credit card through a retailer and getting a high discount on your first purchase. This can hurt your credit score. If ever you’ll need a credit card, make sure it’s a major card. Don’t max out the card limit too.

5) Pay debts

If you have outstanding debts, pay them now. You need not pay them at all once if you cannot do so. You must list down all your assets and liabilities and determine which you can liquidate among the former to pay the latter. Prioritize your payments as well through paying those debts that incur the highest interest rates and fees for non- or delayed repayments.

6) Shop in a prudent manner

When you go shopping, watch your wallet and bring a budget and anything that can remind you that your shopping time is up. For instance, set your phone alarm clock to stop shopping after one hour. In this way, you’d be able to avoid overspending and impulsive buying.

7) Build an emergency fund

No one knows what will happen next. Thus, an emergency fund can help when that time comes. The rule of thumb is to have a fund up to six times your current monthly expenses. Nonetheless, at least a three-month cash cushion will do. If ever you used up the fund, make sure that you replenish it once you get back on your feet financially.

8) Avoid getting into rich quick schemes

Also called Ponzi schemes, these are structures that lure a person to invest with promises of high returns in a few days. These are not true investments. Instead, put your money on tried and tested financial products. Some examples are stocks and properties such as a condo unit, as already mentioned above. While at it, avoid playing too many lotteries and other betting games.

9) Learn the process of investing

As true investors would say, focus on the process, not the products. Your strategies will not be based on products but the process. For one, you must learn to buy the right products for the right reasons and at the right prices. Do so too when selling them. Learn when to hold the products in your portfolio to reap the highest returns possible.

10) Mix up the investment portfolio

Savvy investors know the value of mixing up their portfolios. The reason behind this is spreading the risks among their investments. These investors understand the risks, but they make investment decisions based on calculated risks. With that, don’t be overconfident, too, since complacency is the death knell of every investment strategy.

Saving and investing take time; there’s a learning curve involved. The goal is to learn how to maximize the returns on your investments, perhaps with the use of money that you’re able to save and maximize the savings once your investments start paying off. Now, that’s a wise strategy.