Money is essential as it helps you buy most-needed things, fulfil your life goals, and plan your financially secured future.
However, no matter how much we earn, we can never have enough money for the glorious things we wish to buy, the lifestyle we dream to live or even during emergencies. What helps us the most in the time distress is our savings account.
So, let’s get you started with setting up your savings from day one. As they say, the early you start, the more you save!
- Record monthly expenses:
So you finally decided to start saving. That’s good. The first thing you need to do is analyze your monthly expenses. This includes your household expenses, travel allowances, outings with friends and family, even every tip you give.
Use your bank statements and credit card bills to help you record where you spend your money the most.
Here’s the easy way to do it. You can use budget and spending apps to help you out with categorizing and recording your expenses.
- Set a budget:
Once you get the idea of how much you spend a month, set up a practical budget by organizing your expenses. Having set a monthly budget will help limit any unnecessary spending and make it into a habit of savings.
Also, do consider the allowances that every so often but not monthly such as a house or car maintenance. Once you decide on a budget, also consider how much savings you can do every month. If you have a hefty amount just lying in your bank account, put it to work. Open an FD account and enjoy the return on the interest rate and power of compounding every month.
- Automate your payments:
Set up automatic payments through your savings account for your regular expenses and utility bills. That way you won’t have to pay extra fees because you simply forgot the due date or won’t be tempted to buy things with cash in your hand.
- Find better financial alternatives:
No matter how much savings we do, it happens when we fall short of money for big purchases or even during our times of distress.In such cases, instead of spending your whole savings, you can apply for a personal loan. Getting a home loan when buying your dream is always better as it gives you tax benefits, a large sum at lower interest rates over a longer tenure.
Start early and save more. Do remember saving money doesn’t mean you have to be a penny pincher. Plan smartly and put your parked money to good use, which will eventually turn into the second source of income for you.