What is Saving?

Whatever income we receive, we either spend it or keep it for later. Money that we don’t spend is our saving. The formula is simple. To save more, we will have to either spend less and earn more. It is wise not to spend all that we have at once. We save in jars, piggy banks, bank accounts and other investment options like stocks and mutual fund. 

How should one convince oneself to start saving?

  • Inflation depreciates the value of our money. The money saved today and returns on it can come to use later when the prices of goods and services are high. Saving helps us to keep up with inflation.
  • As soon as we get our first income, start saving. There might be times when we may fall short of earning. 
  • Build an emergency fund. In times of crises, these savings will come handy. Think of an emergency fund as your BAE (Before Anything Else) and start saving towards building an emergency fund Before Anything Else.
  • Save for big expenses and life goals. Major life expenses like education (college fees), wedding, holiday, car, home, etc. can be funded with your well-saved money. Set a goal and regularly save towards it.
  • Save for your non-working days and old age. The expenses will be the same. Moreover, they will increase because of inflation. Star saving early for your retirement.
  • Save and accumulate capital to invest and grab golden opportunities.
  • Save and create wealth to pass on to your next generation.

How to efficiently save more?

It is easy to spend than to save:

  • Turn your mind to saving mode. Once you see money you should think of saving more.
  • Before making a purchase think if that is your need or you want. If you can skip buying it, do so.
  • Instead of vaguely saving, set some targets. List down your goals, the amount you need and the timeline for the same.
  • Take care of yourself and your family. Get regular check-ups done to avoid major damage and expenditure later.

What are the saving mistake one should avoid?

  • Don’t lure into bulk buying discounts. Instead of saving, we usually end up buying more than we need and spend more than our budget.
  • Not knowing where your income is coming from and how much you are spending. Make a cash flow. Have a budget, a spending plan.
  • Avoiding basic saving funds like emergency, retirement, health insurance, etc.
  • Take the help of technology and a financial planner to track your expenses, budget, save and achieve your life goals, become financially secure and independent. 

How to save as a student?

  • Buy or rent used textbooks and sell last semester’s books back.
  • Don’t make impulse purchases.
  • Limit the number of times you eat out monthly.
  • Always pay bills on time to avoid late fees.
  • If you have a credit card, pay it off as quickly as possible.
  • Walk, use public transportation or ride a bike instead of having a car.
  • Live with others so you can split rent and utilities.
  • Shop where they offer student discounts.
  • Sell what you no longer use or need.
  • Open a savings account that earns interest.