Why Saving and Investing Regularly Is a Powerful Way to Grow Your Money

For many Filipinos, saving money might seem like an impossible task. After all, when you’re juggling bills, family needs, and unexpected expenses, it does feel like there’s never enough left over at the end of the month to set aside for your future. Nevertheless, there’s always an opportunity to grow your wealth. Even through small efforts, you can build a solid financial foundation that grows over time. The key to achieving this is to save and invest regularly. In this article, we’ll delve into why you should make it a habit to consistently put money into a savings account or investment instruments so that you can better understand how this can help you reach your financial goals faster.

Helps You Build Financial Discipline and Consistency

The act of saving and investing can feel overwhelming at first. It requires you to shift your mindset and prioritize long-term financial goals over immediate wants, which isn’t always easy to do. However, as you save and invest more regularly, these actions will become a more manageable routine, helping you build financial momentum over time. Doing this will also enable you to approach your finances with intention, rather than reacting impulsively when a financial need arises, allowing you to make smarter, more thoughtful financial decisions.

Furthermore, regularly saving and investing helps you overcome the psychological barrier of “I don’t have enough to start.” A lot of people feel that they must wait until they have a larger sum to invest or save, which isn’t always the case. There are many financial solutions that can accommodate smaller contributions so that you can begin building wealth even with modest amounts.To begin, place your money in a high-interest savings account like Maya Savings. This savings bank account doesn’t only boast a base rate of 3.5% interest p.a. but also gives you opportunities to boost it by up to 15% p.a. All you have to do is complete certain tasks, such as buying prepaid load and spending a total of PHP 1,000 using Maya, to activate the boost. This way, your money doesn’t just sit in your account; it actively works for you, growing faster and taking full advantage of compounding.

Maya Time Deposit Plus is another solution you can take advantage of. This account lets you grow your savings at your own pace by allowing you to start saving without needing to deposit a lump sum. It gives you the flexibility to make smaller, more manageable deposits at any time, making it easier to begin saving and earning higher interest without the pressure of a large initial deposit. This means even your small change lying around at home or in your wallet can be added to your Time Deposit Plus account, helping you steadily grow your savings without much effort.

Each Time Deposit Plus account also starts with a guaranteed 3.5% p.a., which can be boosted by up to 6% depending on your chosen term). To activate the boost, you need to reach your target amount before the tenor ends. The minimum amount to start earning boosted interest rates is PHP 5,000. Additionally, you can have up to 5 active Time Deposit Plus accounts at a time, allowing you to diversify your savings and take advantage of different interest rates and tenors. As such, regularly contributing to your time deposit account can create a positive financial routine that helps you stay disciplined in your financial habits.

Lets You Take Advantage of the Power of Compound Interest

Compound interest is the process where the returns you earn on your savings or investments are reinvested to generate additional returns. For example, you invest PHP 5,000 in a high-interest savings account that earns 3.5% annually. In the first year, you’ll earn PHP 175 in interest (exclusive of taxes). In the second year, you earn interest not just on your initial PHP 5,000, but also on the amount earned from the first year—so long as it remains in your savings account—resulting in a higher interest payout. Over time, this growth starts to become exponential, and if you continue to contribute regularly, you’re essentially amplifying the compounding effect, as the returns continue to build on each other.

To make the most of the power of compound interest, it’s ideal to open a high yield savings account with a savings bank that offers competitive rates. Digital bank Maya, for instance, offers Maya Personal Goals. This savings product lets you earn 4% interest p.a., which is higher than what most conventional banks offer on their savings products. Moreover, it allows you to create up to 5 goal accounts at a time and set them for up to 180 days. This feature makes it easier to allocate your savings towards specific objectives, whether it’s an emergency fund, travel fund, or future investment capital, while earning significant interest. Once your goals’ terms are up, you can simply create new goals with the amount you’ve already saved to earn more.

Leverages Time to Maximize Returns

When it comes to growing your money, time is one of your most valuable assets. The longer your money is saved or invested, the more opportunities it has to grow through the power of compounding and market trends. Consider this: if, at age 25, you place PHP 1,000 every month in a high-yield savings account that earns an annual interest rate of 3.5%, your money will grow to PHP 633,961 by the time you’re 55, gaining a total interest of PHP 272,961 (exclusive of taxes). However, if you wait until you’re 35 to do this, you’ll only end up with PHP 347,746 by the time you’re 55, with a total interest of PHP 106,746 (exclusive of taxes). From this example, you can see how big of a difference ten additional years of compounding can make on your savings.

Growing your wealth doesn’t have to stop with savings accounts. There are also other investment options that can take advantage of the same principle–time. Bonds, for example, offer a relatively low-risk option where your money grows over time through fixed interest payments. The longer you hold the bond, the more interest you earn, and as a result, the more your initial investment grows. Stocks are another popular investment vehicle that can provide higher returns over time. Though they may come with more risk, holding stocks for an extended period benefits you from the overall growth of the companies you invest in, along with potential dividends. The power of compounding is especially evident here, as dividends and stock price appreciation accumulate over the years.

Aside from amplifying your returns, time also helps you ride out market fluctuations. Investing over a long period allows you to take advantage of the natural upward trend in the market, even if there are dips along the way. This means that, while short-term market volatility might seem discouraging, the longer you stay invested the more likely it is that your investment will recover and grow because you’re benefiting from the overall positive market trajectory over time.

Reduces Risk Through Peso Cost Averaging

Many Filipinos are hesitant to enter the world of investments, as they often worry about the uncertainty of the market and the risk of losing money. The temptation to wait for the "perfect time" to invest can be overwhelming, especially when markets are unpredictable. But here's the thing: you don’t need to time the market perfectly to grow your wealth. You can invest regularly—no matter how the market is doing—to reduce the risks and take advantage of market fluctuations. This approach is called peso cost averaging, and it works by allowing you to invest a fixed amount at regular intervals, whether it's weekly, monthly, or quarterly. Instead of trying to predict the highs and lows of the market, you’re simply committing to a steady, consistent investment, resulting in a smoother investment experience.

Peso-cost averaging also helps you buy more shares when prices are lower and fewer shares when prices are higher. This reduces the risk of investing a large sum at a single point when the market might be at its peak, cushioning the impact of market volatility. In the long run, regular investments via peso-cost averaging allow you to weather market downturns and position yourself for greater growth as the market trends upward. It’s a steady, disciplined approach to investing that can help you stay on track to meet your financial goals.

Protects Against Inflation and Sets a Strong Foundation for Long-Term Wealth Building

Inflation is a major factor that erodes the value of your money over time. As prices rise, the purchasing power of your savings decreases, making it harder to maintain your standard of living. Without taking steps to grow your money, you may find that what you can buy today is much less in the future. Thus, saving and investing regularly can help combat the effects of inflation. When you save and invest consistently, you're not just preserving your money, you're growing it in ways that can outpace inflation. Investing in assets such as stocks, bonds, or mutual funds, for instance, often provides returns that are higher than inflation rates, allowing your wealth to grow rather than shrink. Even modest investments, when compounded over time, can provide you with returns that help you keep pace with rising costs.

Aside from protecting you from inflation, regular saving and investing also sets the foundation for long-term wealth-building. The habit of investing consistently helps you develop the discipline needed to build financial security. It allows you to grow your wealth steadily, ensuring that your financial future is secured.

The power of saving and investing regularly is that it doesn’t depend on big sums of money or perfect timing. It’s about making consistent, manageable efforts that add up over time. Also, the earlier you begin saving and investing, the more you set yourself up for a financially secure future, one where you can truly thrive. That said, taking action now, no matter how small, sets you on the path to financial growth and security.