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Want to save but impulses coming in the way? Here’s what to do.

The challenge though is how to “protect” our savings from ourselves? There is only so much self-control we can exercise at any given point of time. It’s easy to start considering big spends, like that smartphone which just hit the market, when we see a relatively big amount accumulating in the bank.

There is a sweet spot in our lives when we are earning enough but don’t have responsibilities. This is a time to enjoy and explore life. It’s also a time you can get a head start on your savings. 

Many of you though are smart enough to realise that saving at least something can be a good move. After all, if you can save, then why not? A little bit of fun and a little bit of responsibility together make for a great combination that allows you to spend in a guilt free fashion.

The challenge though is how to “protect” our savings from ourselves? There is only so much self-control we can exercise at any given point of time. It’s easy to start considering big spends, like that smartphone which just hit the market, when we see a relatively big amount accumulating in the bank. 

What can you do to make sure you allow your savings to grow and achieve much bigger things, than your impulses would allow? Here is a simple five step program to solve this problem for you.

#1. Don’t just let your money stay in the bank account

The first step is to not let your savings just sit in the bank. Learn what financial goals are. It’s time to start using them to your advantage.

#2. Link it to a “big but achievable” goal

Don’t just dream; dream big. Why settle for less in life? Think just a little bit long term. If your savings today can buy you a smartphone, why not a foreign vacation just a couple of years from now? If you think big from a career and salary growth perspective, then why not in terms of your financial goals

Make sure your financial goal is big but achievable. A good way to do this is to think if you allowed your savings to stay “invested” and added to that investment, what can it get you? Let’s consider this next.

#3. Invest it in the right place considering the big goal

A weeklong foreign vacation to a European nation can cost about Rs 3 Lakh per person. Seems like a big amount you’d have to take a loan for, right? Actually, it needs just 48 months and Rs 5,000 to begin with. Anybody can take a vacation on a loan. True coolness is taking a foreign vacation with your savings that you have grown with some smart thinking. 

The Rs 5,000 you save every month can go into a simple and stable liquid fund which can give you about 7% returns per year. This means that given 4 years of time a thousand saved per week can mean a memorable stay in Paris or taking a gondola ride in Venice. It’s that simple. 

At the very least you will have to go redeem your mutual fund units, if you are investing through them. It’s easier to spend money with a digital wallet, credit card, internet banking, or a debit card. When you have to actually redeem units or break that FD, you are far more likely to think twice about that impulsive purchase. 

#4. Be lazy!

The ultimate way to make sure your savings help you achieve your big aims rather than short term impulses, is to simply be lazy! Money invested, though accessible, does require some work to withdraw. 

At the very least you will have to go redeem your mutual fund units, if you are investing through them. It’s easier to spend money with a digital wallet, credit card, internet banking, or a debit card. When you have to actually redeem units or break that FD, you are far more likely to think twice about that impulsive purchase. 

#5. Make allowance for impulses

If you can’t beat them, join them! We all will have impulses and resisting them all the time is too tiring. So simply make allowance for them in your savings. Save for impulses too and put them in a separate bank account. Know thyself and take steps accordingly. 

When you have an aim, you will inevitably find a way. So, get started because your dreams are waiting for you.

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