Savings and investment can be boosted up easily by either by increasing your income or cutting down on expenses. Whether you are on the brim of retirement or a fresher who has just started with his work tenure with a big MNC, savings remains to be the ultimate goal during all stages of our life. Contrary to popular belief, even 50 INR saved today can go a long way in adding to your corpus if invested properly. Today, we are going to take you through some expert recommended tips of hiking up your savings, boosting up income, reducing debt and investing wisely.
- Repay Yourself
Savings refer to that part of our monthly income which is left after paying back all liabilities. But this needs to be computed the other way around. You should first keep a portion of your income aside before deciding on the things to do with the rest. For achieving this, you can opt for automatic transfers to an investment or savings account directly.
- Creating A Buffer For Rainy Days
The first priority of all individuals should be to create a fund for rainy days. This serves as the basis of creating a sound financial plan. Once you have accumulated enough to mitigate about three to six months of expenses, you can shift your focus to future savings and debt reduction. But for benefitting the most out of the same, you need to decide on the type of expenses which can be classified as emergency. For starters, job loss or a major illness can be considered as a true emergency over which you can exercise next to none choice or control. Infrequent expenses such as taking your family out for a world tour or purchasing a new car cannot be classified under the head of emergency although you also need to save for the same.
- Save More By Spending Less
You can trim down your expenses in a variety of ways be it by cutting down on the consumption of the daily premium coffee or frequent salon visits. But while cutting back on the spending, you need to ensure that it doesn’t get spent on any other unimportant avenue. If you are not sure about investing the money, then you can make a pending payment or simply transfer the fund to your savings account.
- Bid Adieu To Expensive Habits
If your day just doesn’t start without a Frappuccino from Starbucks and maybe a costly dine-out at posh restaurants on weekends, then it’s time to cut down on the same. Apart from the obvious health benefits of starting your day with a home-made black coffee and ending it by munching on house cooked food, these small steps taken can inflict great differences in your ultimate savings figure at the end of the fiscal. Once you direct this money towards other sources having higher potential, such as paying off a bank debt, you can free up your money faster. This in turn can be redirected towards further investment. You can make a list of all the debts which need to be paid back and start with the ones having the smallest balances or the highest interest rates.
- Unleash Your Creative Potential To Increase Earnings
You can increase your regular income by either selling off redundant things or maybe getting a part-time job for utilising the time you otherwise spend lazing around on weekends. Taking up full time work can seem burdensome especially when you are working round the clock for the remaining days. It is thus advisable to take up short term projects which can align you towards a specific savings goal. You can also generate extra cash for savings by selling off artifacts and belongings you no longer require such as collectibles, designer clothing, jewellery, musical instruments etc.
- Proper Asset Allocation
While some investments rank high in the department of volatility, others are comparatively tame on the risk-reward scale. Younger people are advised to proceed with aggressive investment options whereas older people approaching their retirement age should stick to the conservative avenues. A direct correlation exists in between risk and return. Thus, if a particular investment house is promising you sky-high returns with equity linked funds, then you should also be adequately prepared to suffice the bloodshed if the market crashes.
- Baby Steps Towards Savings
If savings seems like a difficult challenge for you, then you should start off with smaller targets of maybe 100 or 500 INR daily. Once you have saved adequately and spent it for realising a particular aim, you can continue with further savings so that you can slowly meet off all your debts. If you feel that your savings is not sufficient for meeting long-term investment and major purchases, then your standard of living is definitely higher than what it ought to be. Such a scenario makes it necessary to make major adjustments such as shifting to a more affordable housing or even trading your new car for cheaper public transportation.
- Sticking To An Investment Plan
Steady investors who wish to diverse their portfolio should actually shift their attention towards purchasing more shares whenever the stock market takes a dip. You need to review your investment strategy on timely intervals and remain unperturbed by newspaper headlines during the allocation of funds. The ultimate aim here should be to continue with the investment pattern irrespective of what the newspapers are hinting at.
- Seeking Out Help
Investors often feel confused about which stocks to select and how to optimally balance their portfolio. In such a case, they can readily seek out the assistance of trained professionals. Contrary to popular misconception, financial advice is not earmarked against the wealthy strata of our society. It can benefit everyone who wishes to increase their savings and safeguard themselves from the uncertainties of future.
Conclusion
It is impossible to create a promising future unless you learn the means of prudent investment and judicious savings. Money has a big role to play in regulating the flow of our lives. While it serves as an essential wealth creating tool on one hand, it also acts as a transaction instrument which can satisfy our present requirements. Proper financial planning empowers individuals in meeting their ultimate goal by creating a trade-off in between current and future consumption along with other variables such as savings and investment.
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