RBS is scaling back investments for fiscal responsibility

Like banks, we all have to know when we can invest, and when to reduce banking investments.

09:13 16 June 2013

It is a bit of a concern when banks announce they are scaling back on their investment sectors, such as the announcement recently made by RBS bank. In reality, we all need to monitor finances and know when it is a good time to invest in more banking products, or to reduce our financial risks.

 

Here are a few suggestions to help you with those decisions.

 

• Cash flow—the principle of cash flow is that you need to know your expenses versus your income. You should only invest a portion of your extra cash. Some of the free cash should go in regular banking accounts for things such as clothing, vehicle maintenance, or emergency funds.

 

If you have a decent amount of free cash after expenses, and you are able to set aside enough to manage regular maintenance costs, feel free to invest the additional money.

 

• Tight budgets—if you are already stressed by the amount of monthly expenses you have, investing will not be completely off limits, but it will be in a different form. Getting out of debt and finding ways to create free cash in your budget are going to be the best investments to make when you have a tight budget.

 

• Planning long-term—many people think of making it big on a short-term investment. Sometimes when financial situations are at their worst, and banking accounts are suffering, people are apt to consider different forms of investing.

 

To be successful though, it is best to take a long-term approach to investments. The changes of making a big break with a short-term investment are small, so setting the proper expectations about your investments can help you keep a positive frame of mind, even when things do not seem to go well at first.

 

• Commitment—investments require commitment of banking funds, as well as time. Many time the market values tumble when worried investors suddenly draw out funds.