The first step towards investing is saving. One cannot start to invest if he doesn’t have funds. When you earn, you would most probably make a plan about how you carry on your investments. But at the end of the month, you remain empty-handed since what you had planned earlier, couldn’t get executed properly due to your inappropriate planning or saving habits.
Here is a guide to help you develop your saving habits so that you can achieve your financial goals conveniently.
#1 The Formula: Income – Savings = Expenses
This is the basic formula every individual must follow in their life. But what we do? Income – Expense = Savings. This is totally wrong. Savings must always be prioritized to fulfil financial goals. First deducting savings and then spending the remaining as expenses will also help you to cut down your expenses at certain times.
#2 Start with Small Amounts
It is often common for people that when they start to save, they highly prefer saving majority of the portion from their income source. This always leads to a financial instability and thus, the person gives up on saving the money. Therefore, one must start with saving little amounts.
#3 Be Regular
When you plan to save, you must decide at what durations would you save: weeks, months or quarters. The amount you save will depend on what intervals you save. Once, you start your saving, you have to look that you must continue to save without skipping any installment even for once!
#4 Invest your Savings Somewhere
If you keep your savings at home, you will only tend to take it out for any reason which might not even be so urgent or important. Rather than putting your money in locker, if you invest your money in Recurring deposits or Mutual Funds, they will help you save money and earn some reasonable interests on that saved money. Recurring deposits and Mutual funds can be started by saving and investing just Rs 100 per month. So anyone can start to save in RD or Mutual Funds and develop the habit of saving.
#5 Set a Financial Target/Goal
Your financial target/goal is the main objective that will motivate you to save money. Without any target, you will hardly tend to save money. So it is necessary to find out your financial targets and achieve them by saving money.
#6 Record your Expenses
Whenever you make an expenditure, you must record it. This will benefit you as you will be tracking where your money is flowing and if the expenditure is unnecessary, you can also cut it off.
So, these are a few tips that will help you to develop the habit of saving. Once you inculcate this habit, then you can move on and start saving bigger portions of your income. You can easily achieve all your financial goals by saving and investing them properly.
Thank You for Reading
Finance graduate with a strong desire to understand the complexities of financial markets. I make financial judgments for my investments based on the information I gained during my academic education. I write articles about financial literacy for dstreetanalyser.com in order to promote financial literacy among the general public.