This article was first published in the DNA
All of us understand the benefits of saving and managing our money better. It seems simple enough – put aside a small amount every month as savings. Yet many of us find it hard to save and our expenses leave us struggling at the end of every month.
Worry not! With World Savings Day around the corner, here are 8 simple steps you can take to improve your financial health.
1. Open a new savings account.
Often, we use our salary account for all our expenses and it can be difficult to realise our potential to save. Opening a new debit card. This account can help you build an if you don’t have one, and as the balance in this account grows, you can use the money to invest and grow your wealth.could be the solution for you. Move a part of your salary into this account at the beginning of the month and lock away the
2. Save or invest the surplus.
If you’ve received a raise, it could be tempting to reward yourself with gifts. Before you splurge, check if you have enough in the bank to help you in emergency situations. If not, hold on to that raise. Also, consider investing the surplus into financial instruments such asthat will help you take care of your needs in the future when you don’t have a salary coming in.
3. Get a saving buddy.
We have friends we love to shop with, we have friends we love to go on a food binge with, it’s time to get a friend you can set saving goals with. Get a family member, friend or colleague to monitor your spending habits and vice-versa. This will hold you and your buddy accountable to each other’s saving goals.
4. Pick long-term investments.
Putting your money away with long-term financial instruments such asthrough a SIP will help you inculcate a disciplined wealth creation habit where you benefit from . Further, choose to reinvest over withdrawing in order to maximise .
5. The EMI trick.
While paying off an EMI for a car, bike etc., set aside an affordable amount forsimultaneously and treat it as just another EMI. Once you’re done paying off your regular EMIs, simply transfer the equivalent amount and increase your monthly accordingly.
6. Short-term “penalty” = long-term rewards.
Indulging in luxuries sometimes can be rewarding and let’s be honest, we deserve it. As a tiny “penalty”, put an equivalent amount into your savings or investments to reap benefits later.
7. Utilise tax-saving investments.
Under Section 80C, an individual is allowed a maximum investment of 1.5 lakhs to save tax. Utilise this to invest inand benefit from market-linked returns.
8. Start early
Even though it might seem likeis far away, planning for it should be a priority today. Start backwards with a clear goal on how much you would need at and invest in appropriate to secure your future. The earlier you start, the smaller will be the amount you have to invest each month, and the longer will be the time your money has to compound.
There’s no better time to start investing, than today. You can start your SIP with a small amount and you can gradually increase it to amounts you’re comfortable with. And remember, the longer you stay invested, the better your returns. Happy World Savings Day to you!