Why saving alone is not always enough?
Keeping €10,000 in an account for a year with no return while inflation is running means one thing: the nominal amount stays the same, but in real terms the same money will buy you less later. Saving alone is not always enough — to stop your money losing value over time, it is worth considering putting some of it to work. This article explains how to move, step by step, from managing your everyday finances to saving, and then on to investing.
The path to financial stability usually does not begin with investing. First, it is important to learn to manage your everyday finances — to keep your spending under control, plan your payments, and regularly set aside part of your income for the future.
Today you can use a range of financial tools to do this. For example, with the Paysera financial services ecosystem you can manage your everyday finances in one place — hold an account, make payments and transfers, exchange currency, and use separate accounts for different saving goals. Regular saving can be automated with recurring transfers, so that part of your income is consistently set aside towards a chosen goal.
This can be an important first step in building your own financial system: the funds meant for everyday spending stay easily accessible, while part of your income is regularly directed into savings.
But once you have built up a sufficient financial reserve, another question arises: what should you do with the money you will not need any time soon? Keep it in an account? Carry on saving? Or invest part of it?
Why saving alone may not be enough
One of the main reasons is inflation — the general rise in prices that, over time, means the same amount of money buys fewer goods and services.
Let us say a person keeps €10,000 in an account. If those funds earn no return, a year later the account will still hold the same €10,000. But if prices for goods and services have risen in the meantime, that sum will buy less than before.
The nominal amount of money has not changed, but its real purchasing power has fallen. That is why, over the long term, what matters is not only how much money you manage to save, but also how you manage the funds you have already accumulated.
Saving and investing — different purposes
This does not mean you should simply take your savings and invest them. Saving and investing serve different functions, so it is important to find the right balance between them.
Savings, first and foremost, provide financial security. Easily accessible funds may be needed for unexpected expenses, a temporary drop in income, or a larger planned purchase. That is why it makes sense to keep part of your money readily available and separate from the funds you use for everyday spending.
Investing is for the longer term. Once your financial reserve is in place, you can assess whether you have funds that you will not need any time soon. It is precisely that portion that you might consider directing towards investing and your long-term financial goals.
You can picture managing your personal finances as a step-by-step journey:
Managing everyday finances → Regular saving → Building a financial reserve → Investing spare funds
The Paysera financial services ecosystem can be used for the first stages of this journey — everyday financial operations, managing your money, and systematic saving. And once you have built up a sufficient financial cushion, you can start considering how to put some of your longer-term spare funds to work.
How to choose where to invest
There is no single investment approach that suits everyone. When choosing investments, it is important to weigh up three things: for how long you can commit your money, what return you are aiming for, and how much risk you are prepared to take on.
Investment options are varied — from deposits and bonds to shares, investment funds, and alternative investment instruments, which include crowdfunding. What differs is not only the potential return, but also the risk, the investment horizon, and liquidity — the ability to get your invested funds back quickly if needed. That is why, before investing, it is important to understand what you are investing in, where the return is expected to come from, and what risks you are taking on.
Just as important is the principle of diversification. Instead of directing all the funds set aside for investing into a single investment, you can spread them across different financial instruments or projects. Such spreading can help manage risk, though it does not eliminate it entirely.
Where does crowdfunding come in?
One way to invest part of your spare funds is crowdfunding. The principle is fairly simple: many investors use their funds to finance business projects, and in return for that financing, they aim to earn interest.
Revestus – is a licensed crowdfunding platform where investors can choose business financing projects, with loan repayment secured by a mortgage on real estate.
Before a project appears on the Revestus platform, the project owner, their financial position, the project being financed, and the proposed security measures are assessed. One of the key criteria is the loan-to-value (LTV) ratio — the ratio between the loan and the value of the pledged real estate. The smaller the share of the property's value that the loan represents, the larger the value "cushion" left to absorb any fall in the property's value.
Investors themselves choose which projects to finance and how much to allocate to each investment. This makes it possible to spread the funds set aside for investing across several different projects.
Even so, it is important to understand that even investments secured by real estate are not without risk. The project owner may run into financial difficulties, loan repayment may be delayed, and the value of the realised real estate may be lower than expected. When investing, you may lose part or all of the funds you have invested.
Frequently asked questions
What is the difference between saving and investing?
Saving is for financial security — easily accessible funds for unexpected expenses or near-term goals. Investing is for the longer term and aims to make your money earn a return over time. Investing involves risk, whereas savings, first and foremost, provide stability.
How much money should you keep as a financial reserve?
There is no single right answer for everyone — the size of the reserve depends on how stable your income is and on your personal situation. The key is that the reserve should be easily accessible and kept separate from the funds you use for everyday spending. It makes sense to consider investing only the portion you will not need any time soon.
How does inflation affect savings?
If the funds held in an account earn no return while prices rise, their nominal amount does not change, but their real purchasing power falls — the same money will buy less later on. That is why, over the long term, it is important not only to accumulate money, but also to think about how to manage the funds you have already saved.
What is crowdfunding, and is it safe?
Crowdfunding is a way for many investors to jointly finance business projects and aim to earn interest. In the case of Revestus, loans are secured by a mortgage on real estate — but this does not remove the risk: the return is not guaranteed, and when investing you may lose part or all of your funds.
From saving to investing
Financial well-being is rarely created by a single decision. It begins with everyday habits and consistent management of your own money.
In this financial journey, Paysera and Revestus play different but complementary roles. The Paysera financial services ecosystem provides the tools to manage everyday finances and build saving habits, while Revestus offers the opportunity to direct part of your investment funds into business financing projects secured by real estate.
The most important thing is not to choose between saving and investing, but to understand the role each of them plays in your personal finances. First — manage. Then — save. And once you have built up a sufficient financial reserve — consider investing part of your spare funds.
Because, over the long term, what matters is not only how much money you manage to save, but also how you manage it.
Start by managing your everyday finances with a Paysera account → open your account for free
Explore business financing projects on the Revestus platform.