Not able to Save? Here are the Habits to Adapt
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Are you one of those who finds it difficult to save? Do you also make plans of saving but end up spending every single penny? Don’t worry as you are not alone in this and most people are on the same page. Even though, the sooner you adapt to the habit of saving the better it is for the future know that it’s never too late So, if you have been finding it difficult to start saving, this article can surely help. But first you need to know the importance of saving and how can you do it.
Savings is one habit that can save our life, literally. No matter where you are in your life, what you are doing, what your age is, you must know that a financially secured life is worth living. If you save even 20-30% of your income initially, it can turn into a huge amount. The basis of investments is discipline and the patience. In order to do so, you must have a financial planning as in where you should spend and where you should avoid. So, have a look at the simple steps you can take that will help you a financially stable life.
Table of Contents
How to save more money each month?
Here are the habits to adapt to save on a monthly basis:
- Follow a strict monthly budget plan
- Buy insurance for your family as well for yourselves
- Use credit cards (if any) in the case of unavoidable cases only
- Make investments
There are other ways to save on a daily basis other than the above-mentioned simple steps to save on a day-to-day basis. What matters is that you do save no matter how much you earn and how alluring the shopping sales are. If you really want to be successful in your life, you must learn to save your money as intelligently as you earn it.
What to look for in an investment?
There are n number of saving options in the market but the ones that can give you benefits should be chosen. Returns from products like Gold, Fixed Deposits, Savings Account, Recurring Deposits, etc. are presently not satisfactory from an investors point of view. On the other hand, mutual fund investments or the investment in stocks are on the other hand showing good returns. So, if you plan to invest in Stock Market or Mutual Funds, you must look for the below-mentioned things:
- Know your purpose– A clear perspective of the purpose of the investment is the first and foremost important thing. Many people invest without a predetermined goal and end up withdrawing their money in the middle. Make sure to check the fundamentals like the Company’s current price, profits, good management, etc. which can be found in their corporate filings.
- Do simple investments– Keeping your investment portfolio simple will help you track the growth. The simplest method is to invest in index funds that match the returns of the market as a whole. Or you can invest in equal amounts in mutual funds covering growth, growth and income, aggressive growth, and international.
- Take expert advice– Mutual funds and stock market investments are quite tricky to understand for a layman. In order to create a strong and beneficial portfolio, a professional who can guide you in building your capital by telling you both the pros and cons of the product.
- Invest 15-20% of your income– For starters, it is always advisable to start investing at least 20-30% of the income but if you can maintain 15-20% also, it is good. Even though there is no right time to invest, youngsters have the chance to invest more as they are free from major financial responsibilities and can invest for a longer period.
- Follow the Diversification strategy– As an investor, you should always keep in mind that investments are subject to market risk and investing an individual fund can be risky. So, it is advisable to spread across different funds so that there is a balance between the profit and loss.
- Don’t be emotional– No matter how attractive the fund looks, remember that investments must be done on the basis of facts and not out of emotions. Good investing is actually very boring and checking the performance every other day can sometimes leave you upset. You can check the performance on the quarterly basis.
- Watch the fees– Investment fees are least highlighted in the marketing of an investment product like mutual funds but it is your money and you are only responsible for taking care of it. So, make sure you are aware of the fees like transaction fees, front end loans, and annual fees.
- Have patience– The last but not the least thing you must do is to invest patiently. You should know that investing is a long-term process and if you want good returns, you must have the patience and courage to see your investment rise as well as fall. Do not judge the performance on the basis of the present performance or even the previous year. Think of it in time spans of 20-30 years or more as the longer the wait the tastier the fruit becomes.
How to save more money on a tight budget?
If you are on a tight budget but want to save, do not think that you are out of options. You can invest even a small amount and get good returns if you can manage it in a disciplined. If you can save even as low as ₹1000 on a monthly basis, you can invest in mutual fund SIP. Systematic Investment Plan (SIP) is a platform that encourages you to save a part of your income regularly without pressurizing yourself and affecting your other financial liabilities. If you continue to follow the routine, you could end up saving a lump sum amount that can help you attain your financial objectives.