Scripbox recommends increasing your SIP by 10-20% every year in line with the increase in your salary. However, we noticed that many of our members go the extra mile and make much larger increases in their SIP..
We asked a few of them, how and why they did this, and here’s what we learned:
#1.“I want to reach my goal sooner.”
The most common reason being the realization of how easy it is to save once you set up an automated SIP. A goal that is 2 or 3 years away such as a trip to the States, or buying furniture for your new apartment can be achieved much sooner if you consistently increase your SIP amount.
#2. “I’d like to take a sabbatical from work in the next 6 months.”
For those who wish to take a planned break, it makes a lot of sense to increase their SIP now. This helps in 2 ways:
- By cutting down expenses, so your money lasts longer in your break
- By creating a larger savings pool.
#3. “I cut down on commute by cabs to work by buying a bike. The money I now save has helped me increase my SIP.
This is how a bit of forward thinking can go a long way in creating a virtuous cycle. Use your savings to replace a recurring expense, and create even more savings.
Find your own reasons to increase your SIP in 2018. Make it your priority this year. Increased SIPs every year can enhance your portfolio of investments than constant SIPs.