The habit of saving money can turn out extremely useful if taken up seriously. It is the mantra to “Think and Grow Richer” for improved financial success. To keep enough money saved can help you through tough situations whether it’s a medical emergency, getting admitted to top b-schools, starting your own venture, or going abroad for business meetings.
Savings V/s investments
However, do not be confused between savings & investments as they both have their own importance in life. Both of them play a significant role in realizing your future dreams. Now, what’s important to note is what you actually do to manage savings & investments from the very beginning. This a big decision which impacts your financial future, stress levels & personal growth.
Savings is essentially about keeping yourself cash ready by either investing in financial instruments or savings money in fixed interest rate accounts. Basically, your money must be kept in a liquid form.
If you’re someone who believes in investments, then do understand that the fundamental of saving money is understanding the time value of money. A single tip can bring about all the difference & can be viewed on the balance sheet as free reserves.
Additional Reading on Tips to know If It’s Better to Take a Loan or Use Your Savings?
The longer your money grows, the better it is. It’s a common misconception that saving more money is better, and saving less is bad. But the question is how do you conclude on the total sum to save up? It’s quite a dilemma to decide how much should be sufficient to save in your account & sustain your life for at least 6 months ahead. Of course, that depends on your lifestyle preferences, income levels, retirement pool, so on & so forth.
1. Begin by paying yourself first-
It’s best to start from your own self as an initiative to savings. The technique of “pay yourself first has proven to be good to change people’s behavior.
This helps immensely to build the discipline to put a portion of your income into savings regularly.
2. Make your saving, money easy
There can be times where saving money wouldn’t suit your pocket at all. These could be emergencies which do not let you follow your financial freedom.
Start with small savings & keeping room for sacrifices in the way we like to spend. Perhaps, set up automatic transfers from your salary account into an investment or savings account. Or create a standing instruction for automatic debit. Reward yourself consistently and set targets for the future to reach certain savings levels.
3. Generate Increased Cash for Your Savings
Any financial advisor suggests you contribute large savings towards investment avenues/ business projects. But how do you do that if you wouldn’t earn sufficiently? So you have more cash to earn by changing your habits.
If you own credit cards, then ensure to make full payments on time or maybe shift to a card that pays back reward points to be used for later purchases. Take up a part-time job and use the money earned for your investments. You can easily explore online platforms for freelancing projects or fixed-hour services.
It’s a fight between paying off your debts or saving money instead.
