Invest In India

Tips for Saving

Set financial goals
Saving without a goal is akin to traveling without knowing your destination. It doesn’t take you anywhere. Financial goals bring purpose and clarity to the saving process.

Save regularly
“Pay yourself before you pay others”. Saving has to become a habit and should be handled with equal importance just as any other monthly bill. By putting away small amounts periodically, you do not feel the burden since the process is spread over a long period of time. Earn-save-spend is the ideal approach rather than to save what is left after spending, in order to achieve your financial goals.

Start early
By starting early, you benefit from the power of compounding, rightly perceived as the eighth wonder of the world. After a certain period of time, your money grows exponentially due to the effect of compounding.

For instance, a recurring monthly investment of Rs 1000 over 25 years grows to Rs 13 lakhs at an assumed return of 10 per cent compounded annually. Starting early provides more options with regard to the possible investment avenues and also allows you to take on more risk since there is sufficient time to recover if an investment goes sour.

Create a budget
A budget is the most fundamental tool of personal finance. It gives you a clear picture of your financial affairs. It makes you live within your means and avoid unnecessary borrowings. It highlights areas of concern and facilitates elimination of wasteful expenses.

Watch your expenses
The first step in controlling expenses is to know where each of your hard earned rupee is spent. This would help differentiate between lifestyle expenses (avoidable) and basic living expenses (necessary). The former is the one that mostly causes a strain on your budget and needs to be controlled, if not totally eliminated. Small changes in the style of living can result in major changes in your saving corpus.