Saving money is important!!! why? How?
August 07, 2017
You may be asking yourself why there is so much pressure to save money. If you have enough to pay for everything you need, why should you worry about putting any aside each month? There are a variety of reasons to begin saving money.
Different people save for different reasons. It makes saving easier if you have a clear goal or purpose for the money you are saving.
Here are seven reasons that you may consider saving your money.
- Save for Emergency Funds
- Save for Retirement
- Save for a Down Payment for a House
- Save for Vacations and Other Luxury Items
- Save for a New Car
- Save for Sinking Funds
- Your Education
Saving:
No salary is too small to start saving. No matter what you earn, you must find ways to set aside a percentage of your income for your future needs. This would help you understand the need to live within your means and to foresee and plan for future income requirements.
Planned Savings:
You can commit to paying a part of your income towards a savings or investment instrument. On a fixed day every week, month or quarter, a fixed sum of money would be paid towards this instrument. You should set this date sometime early every month while you still have money in your bank account. These fixed payments would accrue over a period of time and help you earn interest and capital gains.
1) Bank recurring or fixed deposit
2) Mutual fund SIPs
3) PPF
Unplanned Savings:
The amounts you will save these avenues may fluctuate every month. These are incidental savings. Some options:
1) Credit card cash back and discounts
2) E-wallet cash back
3) Bonus income
4) Gift vouchers and deals
Also, prepare a monthly budget in order to understand where you are spending your money and if more avenues for savings can be developed. For example, you may find that you’re eating out a lot, so you could significantly increase your savings by cooking at home.
Schedule payment
A lot of us fail to pay our bills on time and then end up paying extra charges as fine.Instead of worrying about managing your bills all the time, embrace the lazy habit of scheduling automatic payments. This way you will pay your dues on time and manage to save the money you usually spend on paying penalties.
Automatic savings deduction
Open a Savings Account with a high-interest rate or a Recurring Deposit, and automate the transfer of money to those accounts at the start of the month. This way, you start your month with building your savings without having to worry about saving money later in the month once you have overspent your income.
On time Tax payment Something as simple as paying taxes on time can help you save money. If you pay tax on time, you avoid late payment penalties. And the fact that filing taxes online has become so simple and convenient, it is indeed the lazy way to build your savings.
Finally, saving money can be an important part of just enjoying life. Taking a trip to Disney World is a lot more enjoyable when you know that you have paid for the trip with money from savings, as opposed to using credit cards and having to pay for the trip for years to come.
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