Categories
Money

Save $5000 In 6 Months

In this article we give you new ways to save $5000 in 6 months, including from your paycheck, cutting expenses and getting out of debt. In addition, we will give you some tips to make saving your paycheck easier. We will also breakdown the details of budgeting, saving and how to get ahead financially. Learn how to save money faster, cut expenses, get rid of credit card debt and build an emergency savings fund.

First, how much money do you need to save $5000 in 6 months. Saving $833 each month will help you achieve your goal ($5000/6 = $833). In addition, saving $27.77 each day is another way to reach the $5k goal ($5000/180 days = $27.77). Next, the question is where does the money come from in determining how to save $5000 in 6 months?

The Typical American Savings

Most Americans Don’t Save Enough Money; Saving Requires Sacrifice

In a November 2020 survey conducted by Highland Solutions, 82% of Americans surveyed said that they do not have $500 saved for an emergency. In addition, the survey found that 63% of Americans say that they have cut back on spending because of the COVID-19 pandemic. Clearly, many Americans are scared and could benefit from learning about creative ways to save money.

According to Business Insider, the average American Family has approximately $40,000 put aside in savings and investments. While this may sound like a lot of money, it’s not. Think of your monthly expenses and then consider for how long you could live on $40,000. Finally, the answer is you need much more money than you have now.

Understandably, it’s difficult to know how to save $5000 in 6 months. Everyone has to pay rent or a mortgage, pay for food, electricity, water and in many cases, a car loan. Life is expensive.

Saving money can be difficult. In many cases, saving requires that you make sacrifices in your life. For example, you might have to continue driving an older car instead of buying a new one, or do home repairs yourself instead of calling a professional for help. Obviously, no one enjoys making sacrifices.

Save As Much as You Can

The best way how to save $5000 in 6 months is to save as much money as you can afford. However, many people believe that they are unable to save because of their financial circumstances. For example, perhaps you have too much debt or don’t make enough money to save. This is where creative ways to save money can be a benefit.

As a rule, you should try to save 10-20% of your income each pay period. If this sounds impossible, it is not. Continue reading and you will discover that you can save money each month by making simple changes to your lifestyle and budget. You may find that you have been throwing money away that could have been saved!

The Best and Quickest Ways How to Save $5000 in 6 Months:

  • Sell Things You Don’t Need
  • Rent Out Your Room or Car
  • A Side Hustle job
  • Borrow Money (Last Resort)

Sell Items Lying Around the House

Sell Things Like Electronics, Jewelry and Name Brand Items Online or in a Garage Sale

The quickest way to get cash and how to save $5000 in 6 months is to sell things. Take an inventory of what you have at home that isn’t needed. Cell phones, gift cards and electronics are quick sellers. Other items that you may have not considered include:

  • Jewelry
  • Vintage toys
  • Fitness equipment
  • Collectibles
  • Name Brand Items (Apple, Bose, Tiffany, Etc.)

First, the common places to sell the items include eBay, Etsy, LetGo, Swappa, Gift Card Granny and Gazelle. Each of these sellers offers a phone app so you can easily manage purchases directly from your cell phone. The money from each sale goes directly to your bank account. Note: fees may apply.

Second, if you want to know how to save $5000 in 6 months, have a garage sale. Garage sales are great if you want to avoid the hassle of photographing and listing items for sale online. In addition, each sale generates instant cash.

Finally, a hybrid of online selling and hosting a garage sale is Facebook Marketplace. Facebook Marketplace works as an online garage sale and allows you to reach a larger marketplace of buyers compared with selling in your neighborhood.

Convert Coins to Cash

Another way for learning how to save $5000 in 6 months is cashing in coins. Many people put extra change from their pockets in a jar at home and forget about it. If you if you want to know how to save $5000 in 6 months, you can simply take the change jar down to your bank or a coin exchange. For a small fee, the coins are quickly counted and paid out in cash. If you have a bank account, check with your bank for coin exchange service. In addition, Coinstar is a popular coin exchange as well.

Rent a Room/Car

Earn Extra Money Renting an Extra Room and Rent Your Car

One hidden secret for how to save $5000 in 6 months is subleasing and renting. If you have a spare room or place to lease you can rent it out. Many people think of Airbnb as a vacation rental site. However, you can also rent out an extra room using Airbnb, the local paper or Craigslist to earn extra cash. Note: there’s a lot of issues to unpack regarding renting a room to a stranger, so make sure you do your research if you decide to rent out a room.

rent a room extra cash

Have a car that you hardly use? You can also rent your car. Sites like Turo allow you to list your vehicle on their site and earn extra cash from rental fees. Vehicle protection plans are available and you earn approximately 65-85% of the trip price.

More Ideas to Earn Extra Money

Great Ways to Earn Extra Money Include Seasonal Work, Side Hustles and Starting a Business

One dirty little secret that successful people don’t share about their success is what they had to do to become successful. Successful people often work 2-3 jobs, work long hours and work to do things that no one else wanted to do. But this job is also how to save $5000 in 6 months for some people.

It’s not glamorous to deliver pizzas or wash cars when you have a master’s degree from a prominent university. But sometimes to get ahead you have to swallow your pride and do what must be done. I’m not suggesting that you do anything illegal to make money; on the contrary, there are plenty of legal jobs that will earn real money for you. Note: these ideas don’t earn money as quickly as selling your personal items.

Seasonal Work

Seasonal Jobs Include Retail Workers, Tax Season Workers and Vacation Season Workers

During the holidays, seasonal workers are needed in most areas. The Fall holiday season is the busiest shopping time of the year. Employers hire extra staff to help with the higher demand from customers. Examples include retail sales, delivery drivers and merchandise stockers.

Other seasonal jobs include working in the tax industry during tax season and working festivals and resorts during the summer or winter vacation season.  Seasonal jobs can be a great way how to save $5000 in 6 months.

Side Hustle

Having a side hustle has become more common these days. Unfortunately, many people work a second job simply to make ends meet. But there’s no shame in working hard to get ahead. Common side hustles today include:

  • Uber/Lyft Driver
  • Food/Grocery Delivery
  • Dog Walking and Sitting
  • Babysitting
  • House Cleaning
  • Gig Economy Services (Fiverr)
  • Freelance Work Online
  • Tutoring
  • Wash and Detail Cars

Start a Business

There are Great Opportunities for Starting a Business, Including Service Industry Business, Home Based Business and Home Sales Business

If you read or see the news, you may believe that there’s no hope for you to make money. However, there’s never been a better time to start a business. The opportunities are endless for someone willing to put in the work. You can start a business locally in the service industry, such as delivery, massage, home/car repair, pet sitting/walking, babysitting, etc. None of these businesses require an office or a startup cost.

start a business

If you don’t want to start local service business, you can work from your computer at home. Another way to figure out how to save $5000 in 6 months can be to sell things online. For example, some of the platforms available for online selling include Amazon, eBay, Etsy and Facebook Marketplace. You can buy and sell new or used items. In addition, you can create your own brand. There are many options for selling goods online.

Also, you can sell services online. Are you good at building websites, social media or marketing? Many businesses now have an online presence and they need marketers and SEO consultants to help them reach customers.

Saving Money: You Need a Budget

Saving Money is Within Reach if You Use a Budget and Take Control of Your Finances

If you are thinking about how to save $5000 in 6 months, then you are thinking about the future. Furthermore, what you are really asking is, “do I have enough money for the future?” To answer the question about money, we need to find out more information about how you spend money and your assets.

Budgeting is one of the critical steps that can help you take control of your life and answer these questions. In addition, preparing a budget allows you to not only know where your money goes, but also allows you to plan where your money will go in the future. Finally, it’s important that your money works for you, not against you.

In the process of taking control, we also prepare ourselves for better quality of life by having more money. Having more money means that you have more power to dictate the kind of life you want, especially as you grow older.

Create a Budget Now

One of the best ways of learning how to save money from salary is to learn to budget. That is, it’s important to keep track of your money. And a budget helps you achieve that objective. Having a balanced budget means spending less of your paycheck. Preferably, you will have some money left over to pay off debt and save for the future. In short, everyone should budget, whether you are a large corporation or just one person.

Live below your means

Eliminate Unnecessary Expenses: Dining Out, New cars and Designer Clothing

In many cases, frugal living is the cornerstone of financial success. This simply means spending less than you make. Moreover, creating a simple monthly budget can assist you in determining whether you are meeting your goal. In addition, learning to be frugal can help you find ways to determine how to save $5000 in 6 months. For example, when you eliminate extra expenses that are unnecessary, you will have more disposable income available for saving. As a result, your savings from disposable income are how to save money from salary.

Unfortunately, living frugally is not popular in the 21st century. Popular culture tells us what “normal” consumer behavior looks like. And it’s considered normal to go out and spend money at restaurants, on vacations and the like. In addition, it’s “normal” to buy a big house and drive a new car.

Cut Expenses and Control Spending

List Items to Remove from Your Budget: Memberships, Subscriptions, Etc.

No matter what kind of budget you have, it’s critically important that you cut expenses. Before you start your budget, begin finding areas in your life where you can make cuts. Cutting expenses will help you discover how to save money from salary.

It is helpful to make a list of what expenses are needs and wants. For example, paying for electricity is needed; having a spa membership is a want.

In addition, you will also want to figure out ways to cut spending. This will help you save more money quickly. Ideas for Budget Items to Cut:

  • Memberships (Spa, Gym, Entertainment, etc.)
  • Subscriptions (Magazines, news, etc.)
  • Eating Out
  • Cable
  • New credit card spending
  • Traveling/vacations

Stop Using Credit Cards

If you are starting a budget, you probably have credit card debt. The problem with credit card debt is not the debt, it’s the interest. First, every day that you maintain a balance on your credit card, interest compounds. Compounding interest works against you when you’re trying to pay off debt. Finally, getting rid of credit card debt will assist you in discovering creative ways to save money.

Save Money Every Paycheck

Put Aside 10-15% of Your Regular Income as Savings

One of the habits that you want to form that will help you reach your savings goal is to start saving each paycheck. Make it a habit to take 10-15% of each paycheck and save it. After a short time, you will realize that you don’t even miss the money. This is the quickest method used on how to save money from salary.

First, make saving 10-15% of each paycheck easy by setting up an automatic money transfer to your savings account. For example, each time your paycheck is deposited into your checking account, have an automatic transfer set up that moves money into your savings account. Some people even have a savings account that is in a different bank to reduce the temptation of borrowing from the account.

Finally, saving a small portion of your regular earnings is far from a new concept. Financially successful people have been doing it for hundreds or thousands of years. Read The Richest Man in Babylon to learn more.

Start Saving Today

Hopefully, we have helped provide you with some creative ways how to save $5000 in 6 months. No amount of money is too small when it comes to saving, even if you can only save the change you have in your pockets. And, it’s never too late to start saving. If you can’t save enough to reach your goals, start saving anyway. Anyone who is determined to learn how to save money from salary can do it.

In addition, it’s never too late to start saving and investing. If you don’t have any savings and you are 40 years old, you need to make a big change today. Even if you can’t save enough to reach your goals, start saving anyway. We have provided you with the basic tools to get started saving. Every Dollar you save or invest today can grow in the future. Furthermore, the more that you procrastinate, the more difficult accumulating wealth becomes. Therefore, it’s best to start saving today.

Read More:

Why Saving Money is Important

How Much Savings Should You Have at 40?

How Much is a Dollar Worth?

The Best Budget App

10 Things to Know Before Starting a Budget

Debt Elimination

Wealth Building Cornerstones

Value Investing Books

Disclaimer:

It is important to note that Piggy Bank Coins does not provide financial advice. We do not endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals, and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.

Categories
Budgeting

How To Save Money On A Tight Budget

In this article we’ll discuss how to save money on a tight budget, including budgeting, side hustles, cutting spending and understanding economic cycles.

Americans are struggling financially right now because of COVID-19 shutdowns. Many people live paycheck-to-paycheck and have no savings. As a result, a sudden loss of employment caused them to face economic ruin or bankruptcy.

According to a recent CNBC article using data from SurveyMonkey, millions of Americans have lost their savings.

“Since the virus was declared a pandemic, 14% of Americans — up to 46 million people — said they’ve wiped out their emergency savings” -September 1, 2020 CNBC.com News Article entitled, “Nearly 14% of Americans have wiped out their emergency savings during the pandemic”

Higher Unemployment Due To COVID-19 Shutdown

The COVID-19 shutdown of 2020 turned out to be devastating like the American Great Depression of the 1930s. Workers who were laid off or lost a job from the COVID-19 fallout are in dire straits. Many people have had to borrow money from pensions or a 401(k) just to make ends meet. Others have had to file for unemployment or ask for government assistance.

Many people are struggling to pay rent. Some home owners have lost their home and many more are at risk of losing assets such as homes, cars and investments. There’s no doubt that this is a scary economic time for most Americans. And many people realized that they should have been thinking about how to save money on a tight budget earlier.

Learn the Secret from Thousands of Years Ago: Saving

But what if I told you that much of the economic suffering and devastation felt by most Americans today could have been avoided? There is actually a secret that your grandparents and great-grandparents knew that can help you be prepared in the future. It’s not some ancient wisdom or magical solution that only a few people know. In fact, the secret is actually knowledge that has been around for thousands of years.

Experts Have Discovered That Economic Events Happen in Cycles

The Seasons, the Planets and Human Life Itself Are Cyclical

Before we get to the secret to avoiding economic disaster and how to save money on a tight budget, let’s discuss more about economic catastrophe. Unfortunately, the American Great Depression and the COVID-19 shutdown of 2020 were catastrophic events. Yet, some very intelligent researchers have determined that much of what we experience in our lives revolves around cycles.

Investing In Commercial PropertyThe sun and the moon follow a cyclical pattern that is predictable. In addition, the earth’s movement through the universe and it’s relationship to other stars is part of a greater cycle. But here on earth, there are many more cycles. The life of a human being is part of a cycle. You are born, you become a youth, then middle aged, followed by elderly life and death. Our season are cyclical: Fall, Winter, Spring and Summer. Researchers have discovered that our economy is cyclical as well.

Economist Ray Dalio and the Economic Machine

Ray Dalio, an economics expert from Bridgewater Associates, has created some really intelligent free videos on understanding economic cycles. He also is the author of the book, “Principles.” Dalio is really good at simplifying economic ideas and helping you understand why things happen as the do.

The Secret to Winning in the Economic Cycle: Save Money

When life is cyclical, it simply means things go up and then they go back down. The pattern repeats itself in a cycle that goes on forever. Moreover, in the natural world, animals are aware of the cycle of the seasons. For example, squirrels have the natural instinct to bury acorns during the summer and build their nests to prepare for the bitter cold of winter.

Although humans no longer depend on instinct to survive, we can still use our higher brain function to make decisions. If we know that the economic cycle goes up and down, then sometimes we will have more money and other times we may have less money. Following this logic, it makes sense for us to save money during the times that we have more money. When we learn how to save money on a tight budget, we are better prepared to weather the storm of bitter economic times.

The Art of Saving Money

Warren Buffet Teaches That Saving Money Prevents You from Spending Money

Unfortunately, saving money is a lost art. Historically, people’s lives depended on saving money. If a natural disaster struck or just bad luck, people could fall back on the money they saved to stay alive. Today, life is easier. Credit is widely available to most people and we frequently borrow money for cars, houses and purchases on credit cards.

But, finding how to save money on a tight budget can be critical to your financial well-being for several reasons. First, learning to save money requires that you learn not to spend your money. Warren Buffet famously said that the most important rule of investing is “to not lose money.” The lesson is don’t spend all your money. Instead, save some money. Saving money is an excellent habit to learn and maintain.

Second, developing the discipline to find how to save money on a tight budget will give you the confidence to seize opportunities when they arise. When people live paycheck-to-paycheck, they waste their time struggling with bills, instead of focusing on future wealth creation. In addition, as your income becomes more limited in old age, you will depend on cash savings to pay for things like medical care and expenses.

Create a Budget

One of the best method for how to save money on a tight budget is to learn to budget. That is, it’s important to keep track of your money. And a budget helps you achieve that objective. Having a balanced budget means spending less of your paycheck. Preferably, you will have some money left over to pay off debt and save for the future. In short, everyone should budget, whether you are a large corporation or just one person.

Live below your means

Don’t Waste Money on Unnecessary Expenses, Such as Eating Out, New cars and Designer Clothing

In many cases, frugal living is the cornerstone of financial success. This simply means spending less than you make. A simple monthly budget can assist you in determining whether you are meeting your goal. In addition, learning to be frugal can help you find how to save money on a tight budget. For example, when you eliminate extra expenses that are unnecessary, that money can be used in how to save money on a tight budget.

Unfortunately, living frugally is not popular in the 21st century. Popular culture tells us what “normal” consumer behavior looks like. And it’s considered normal to go out and spend money at restaurants, on vacations and the like. In addition, it’s “normal” to buy a big house and drive a new car.

Cut Expenses and Control Spending

List Items to Remove from Your Budget: Memberships, Subscriptions, Etc.

No matter what kind of budget you have, it’s critically important that you cut expenses. Before you start your budget, begin finding areas in your life where you can make cuts. Cutting expenses will help you discover how to save money on a tight budget.

It is helpful to make a list of what expenses are needs and wants. For example, paying for electricity is needed; having a spa membership is a want.

In addition, you will also want to figure out ways to cut spending. This will help you save more money quickly. Ideas for Budget Items to Cut:

  • Memberships (Spa, Gym, Entertainment, etc.)
  • Subscriptions (Magazines, news, etc.)
  • Eating Out
  • Cable
  • New credit card spending
  • Traveling/vacations

Stop Using Credit Cards

If you are starting a budget, you probably have credit card debt. The problem with credit card debt is not the debt, it’s the interest. Every day that you maintain a balance on your credit card, interest compounds. Compounding interest works against you when you’re trying to pay off debt. Getting rid of credit card debt will assist you in discovering how to save money on a tight budget.

Save Money Every Paycheck

Put Aside 10-15% of Your Regular Income as Savings

One of the habits that you want to form that will help you reach your savings goal is to start saving each paycheck. Make it a habit to take 10-15% of each paycheck and save it. After a short time, you will realize that you don’t even miss the money.

First, make saving 10-15% of each paycheck easy by setting up an automatic money transfer to your savings account. For example, each time your paycheck is deposited into your checking account, have an automatic transfer set up that moves money into your savings account. Some people even have a savings account that is in a different bank to reduce the temptation of borrowing from the account.

Finally, saving a small portion of your regular earnings is far from a new concept. Financially successful people have been doing it for hundreds or thousands of years. Read The Richest Man in Babylon to learn more.

Always Keep an Emergency Fund

Unfortunately, emergencies happen to all of us. Having money for an emergency is critical. Many investment and debt consultants recommend that you start with $1,000.

Emergencies can come in many forms. Examples of emergencies you should be prepared for include medical issues, home repairs, car repairs, natural disasters, etc. Once you reach your goal of $1,000, start saving for the longer term. Some experts recommend having 3-6 months of salary saved for emergencies.

Saving for emergencies should probably be one of the first things that you do, even before saving for retirement. Make it a priority in your budget and you will rest better at night knowing you have prepared for the future.

Keeping Up with the Joneses

Don’t Pay Attention to What Others Are Doing: Focus on Budgeting

Don’t get caught up trying to keep up with the Joneses. Who are the Joneses? Mr. and Mrs. Jones are your neighbors who live in the big, two-story house. They just bought a new SUV and a new boat. The Joneses always seem to have flashy, new things.

It takes some discipline and habit changes, but in order to be successful at your budget, you must forget about what the Jones family is buying. Remind yourself buying new things prevents you from getting ahead and puts you further behind in debt. Moreover, what’s important is sticking to your budget so that later you can have financial security.

Finally, if you really want to know about the Joneses, let me tell you. They are in so much debt from buying all those new things that they will probably be asking you for money soon.

Increase Your Income

Great Ways to Earn Extra Money Include Seasonal Work, Side Hustles and Starting a Business

Some people who complete their budget may realize that they don’t have enough money to start saving. Perhaps all your money goes to bills each month, or you just have a lot of family and friends for which to buy gifts.

The best ways to make more money fast:

  • Sell Things You Don’t Need
  • Rent Out Your Room or Car
  • A Side Hustle job
  • Borrow Money (Last Resort)

One dirty little secret that successful people don’t often share about their success is how hard they work. Successful people often work 2-3 jobs, work long hours and work to do things that no one else wanted to do. Working hard at a side hustle may be one of the best how to save money on a tight budget.

It’s not glamorous to deliver pizzas or wash cars for money. However, sometimes to get ahead you have to swallow your pride and do what is necessary. I’m not suggesting that you do anything illegal to make money; on the contrary, there are plenty of legal jobs that will earn real money for you.

Start Your Own Business or Side Hustle

Having a side hustle Has become more common these days. Unfortunately, many people work a second job simply to make ends meet. But there’s no shame in working hard to get ahead. Common side hustles today include:

  • Uber/Lyft Driver
  • Food/Grocery Delivery
  • Dog Walking and Sitting
  • Babysitting
  • House Cleaning
  • Gig Economy Services (Fiverr)
  • Freelance Work Online
  • Tutoring
  • Wash and Detail Cars

Start Saving Right Now!

No amount of money is too small when it comes to saving, even if you can only save the change you have in your pockets. And, it’s never too late to start saving. If you can’t save enough to reach your goals, start saving anyway. Anyone who is determined to find how to save money on a tight budget can do it.

Furthermore, the more that you procrastinate, the more you put yourself at risk for the future. Therefore, it’s best to start saving today.

Read More:

What is Tier 1 Credit

10 Things to Know Before Starting a Budget

Debt Elimination

How Much Was a Dollar Worth in 1960?

The Best Budget App

Buyer’s Guide for Used Cars Drowning in Debt Why Airbnb is Successful

Disclaimer:

It is important to note that Piggy Bank Coins does not provide financial advice. We do not endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals, and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, to help you make the best choice for you.

Categories
Gold & Silver Money

Gold Backed Dollar

Do you know the difference between the gold backed dollar and fiat currency? In this article we discuss and define what the gold backed dollar is, the history of money in the US and make some gold predictions. We also look at why gold may be a solid addition to your investment portfolio based on political and economic changes today.

Current Economic Crisis in the United States

Debt and Unemployment are High, Interest Rates Low and COVID-19 Strikes; The Stock Market is Soaring – Something is Wrong

According to Experian data, consumer debt has grown to around $14 Trillion in 2019. Debt for Americans has been increasing steadily since at least 2009. This debt includes things like credit cards, home loans, vehicle loans and student loans.What is Wholesale Property?

In addition, Americans are struggling financially right now because of COVID-19 shutdowns. Many people live paycheck-to-paycheck and have no savings. As a result, a sudden loss of employment caused them to face economic ruin or bankruptcy. According to the website Trading Economics, July 2021 unemployment is estimated to be approximately 5.4%. Although this is much lower than the double-digit unemployment numbers from 2020, Americans are still struggling to find employment.

The Catastrophic Dot Com Bubble of 2000

The Dot Com Bubble that began in March 2000 caused the S&P 500 Index to drop almost 50%. This bubble bursting lasted until 2007. That means that if you were planning to retire in 2000, and many of your investments were locked into a Wall Street 401(k) that fell 50%, you couldn’t retire. Many people at this time were forced to return to work because they couldn’t afford to retire.

Currently, Wall Street stock prices are at record-breaking levels. Prices are high, interest rates are low, and everyone is cheering the mania. Many are questioning whether this will end badly like in 2000 and 2008.

World Reserve Currency

Subsequent to World War II, the United States Dollar became the official world reserve currency. As a result, a critical chapter was written on US Dollar history. Historically, the US Dollar was a gold backed dollar. This forever shaped the future of the country; however, the stability in the US economic strength didn’t last and ultimately, the US ended the practice of backing money with gold. The impact of this change to global finance was significant and had long-lasting impacts on both US influence and power, as well as purchasing power outside the United States. A reserve currency is one where the central banks maintain a fixed exchange rate with a particular currency and their own currencies. In this case, the US Dollar became the reserve currency. As a result, this change played a vital role in the financial stability and prosperity that Americans enjoyed in the latter 20th century.

As world reserve currency holder, the United States was required to redeem US Dollars for gold. Additionally, after World War II, the United States was one of the largest holders of gold bullion in the world. As a result, world reserve currency status for the US Dollar seemed like a natural fit. Unfortunately, in 1971, deficit spending by the US and an excess of paper money caused countries to increase the demand for gold. In response, the US Dollar changed forever, and the Dollar was no longer on the gold standard, separating the gold backed dollar from fiat. This meant that gold would no longer back the Dollar. Many believe the end of the gold standard was the beginning of how the dollar lost its mojo and the gold backed dollar gave way to fiat.

Countries Using the US Dollar

“Five US Territories and seven sovereign nations use the US Dollar as their official currency.” –Investopedia

The territories include Puerto Rico, Guam, the US Virgin Islands, Northern Mariana Islands and American Samoa.Next Generation Money Management

In addition, the following countries utilize the US Dollar:

  • British Virgin Islands and the British Turks and Caicos Islands.

Countries throughout the world that use the US Dollar as a surrogate or a proxy for their own currency include:

  • Panama, Zimbabwe, Cambodia, Ecuador, the Bahamas, El Salvador, Nicaragua, Timor-Leste, Micronesia, Palau, Marshall Islands, Bahamas, Barbados, St. Kitts and Nevis, Costa Rica, Belize, Myanmar, Caribbean Territories and Liberia.

Note: if the dollar loses reserve currency status, the countries will no longer have reason to use the US Dollar. As a result, the end of the gold backed dollar may become a huge political issue, potentially ending in an impotent US Dollar, a weaker US economy, hyperinflation, and political and financial collapse.

Fiat Currency

It’s important to understand what fiat currency is and the difference between real money and fiat currency. Furthermore, understanding the relationship of the gold backed dollar currency to fiat currency is critical as well. Gold and silver do not act to back fiat currencies. Fiat currency is a promissory note from a government. As a result, fiat currencies frequently fall prey to high inflation, devaluation and ultimately failure. They typically have no intrinsic value. Unfortunately, most modern currencies are fiat currencies. Some investors believe that the US Dollar being a fiat currency is how the dollar loses reserve currency status.

Why Fiat Currency is Popular?

Central Banks, such as the Federal Reserve Bank of the United States, can increase the money supply and increase fractional reserve banking by printing more fiat currency. As a result, these central banks can use the power of interest rate change and money printing to manipulate entire economies.

Although the central banks have good intentions, their meddling with the economic system can wreak havoc on the economy and cause distortions in markets. Often, altering interest rates and printing money simply delays the problem, requiring bigger solutions later. Many investors believe the weakening fiat market may be the domino that leads to how the dollar loses reserve currency status in the world. Furthermore, the debate of the gold backed dollar has been raging in response to dollar devaluing over time.the principles of finance with a clear plan to financial success. We will give you a guide for how to get out of debt, save money and invest for retirement.

Real Money

What is real money?

Something generally accepted as a medium of exchange, a measure of value, or a means of payment: such as officially coined or stamped metal currency, money of account or paper money. –Merriam-Webster Dictionary

Is the US Dollar Real Money or Fiat Currency?

A currency not backed by gold or silver is not real money. Unfortunately, government promises do not meet the criteria. Fiat currency is simply a legal tender paper note that the government requires everyone to use for payments. By definition, fiat currency is incontrovertible to gold or silver.

On the other hand, real money must have the backing of valuable or tangible assets. For example, tangible commodities such as gold and silver have supported currency. In addition, money backed by gold and silver has a value tied directly to the value of the silver or gold asset. As a result, real money is inherently stronger than fiat currency. As a result, it is not easily manipulated. Real money is also resistant to inflationary forces. Unfortunately, being a fiat currency is how the dollar loses reserve currency status.

Future of the US Dollar

It is unclear what the future holds for the US Dollar in the long-term or whether the dollar loses reserve currency status. The US Dollar remains as the world reserve currency; however, it’s role in this position may be for a limited time. Unfortunately, gold and silver do not support the Dollar. Yet, the strong US economy support its world reserve currency status. Financial analysts believe that so long as the US economy is strong, the US Dollar will remain strong. However, US debt and trade deficits continue to grow, putting pressure on the US monetary system.

Alarming Trends at the Federal Reserve and Debt-to-GDP Ratio

Two alarming trends are that the debt to GDP ratio is at 150% and that the Federal Reserve Bank owns 30% of US mortgage securities. First, most experts agree that when the debt-to-GDP ratio climbs higher than 100%, you are in the economic danger zone. Historically, high debt-to-GDP ratios have ended badly.

Unfortunately, this is bad news for the United States economy. As a result, people’s investments and retirements could be badly damaged. So, what does an investor do to minimize risk and survive the upcoming economic depression? Let’s look at gold.what is gold bullion

Reasons Investors Buy Gold:

  1. Gold is a store of value. National currencies (even the U.S. Dollar) come and go. But Gold has been around for thousands of years as real money.
  2. It is a liquid asset. Gold (and other metals) can be easily bought and sold in most large cities around the world. It can be exchanged for most currencies this way.
  3. Gold is a tangible asset. You can hold gold coins in your hand or put them in your safe. No waiting for the bank to open to get them. No worrying about destruction by fire or a hacker.
  4. It is a hedge against inflation. Gold tends to thrive during a crisis. Investors tend to jump into gold when stocks go lower.
  5. Gold is private. No other asset offers privacy like a gold coin. A transaction in gold between you and another person is truly a private affair.

Future of Gold

Unemployment, Debt, 0% Interest and Fed Money Printing Drive Gold Prices Higher

We at Piggy Bank Coins believe that gold (and silver) has a bright future. Holding a real money asset such as gold will always be highly regarded by investors. In addition, having gold in your investment portfolio is considered by many to be a safe and secure option. It’s important to grow your wealth while minimizing risk. Specifically, gold is a real, tangible money that can be a store of wealth for a lifetime.

We believe the gold price forecast indicates that demand will continue to grow and that investors should continue to hold gold and silver. With the political and economic instability created in the United States, gold prices will likely increase. For instance, investors will continue to move toward safe harbors. Make no mistake, gold is the safe harbor. As a result, when discussing the gold backed dollar, there is no comparison.

Second, since 1944 the US Dollar has operated as the world reserve currency. However, the US economy appears to be faltering with high unemployment, high national debt, near-zero percent interest rates and inflation from Federal Reserve money printing. As a result, investors will be looking for something safe to hold on to, and precious metals may be that rock.

The Gold Price Forecast Predictions

Four Gold Price Predictions: $2,300, $3,000-$8,000, $15,000 and $26,000.

Goldman Sachs raised its gold price forecast in July 2020. The investing firm believes that gold will hit $2,300 per ounce as investors flee other falling price investments such as real estate.

According to Jeff Clark, Senior Analyst at GoldSilver gold has a 95% likelihood of going higher in 2021. In addition, he is predicting $3,000-$8,000 gold in the next 5 years.

In an interview with Kitco News in mid-2020, Investor Jim Rickards predicts that gold will rise to $15,000 per ounce before 2025. He bases his prediction on inflationary forces.

In the same interview with Jim Rickards, Investor Peter Schiff predicted gold will rise as high as $26,000 per ounce. He bases his prediction on extrapolating DOW Jones trading values in relation to gold in 1932 and currently.

Wrap Up: Gold Backed Dollar

Understanding the relationship of the gold backed dollar with fiat currency is critical to the American economy. The American powerhouse economy established after World War II was based upon gold, which supported the US Dollar. However, since 1971, US money was not backed by gold and is simply a fiat currency based upon faith. As the US Economy builds deficits and debt, pressure increases from other trade nations to use other currencies that are considered more stable. As a result, the gold backed dollar controversy continues.

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Disclaimer: It is important to note that Piggy Bank Coins does not provide financial advice. We don’t endorse or recommend any financial investments. Instead, we provide information for educational purposes to those seeking knowledge regarding personal finance. However, in the spirit of transparency, note that the author is an investor in cryptocurrencies, precious metals and some equities.

In addition, The Federal Trade Commission (FTC) requires that Piggy Bank Coins disclose to readers that we may receive commissions when you click our links and make purchases. However, this does not impact our reviews and comparisons. Moreover, we try our best to keep things fair and balanced, in order to help you make the best choice for you.