[Meta]
— An individual needs money at different points in life. Right from
planning a vacation to buying a house, all goals require savings to
be realized. With the right disciple & patience, savings can be a
cakewalk.
We all wish to have a huge savings at all
points in time! However, reaching that goal of having enough savings
requires a huge amount of patience & discipline. It takes a plan
that is adhered to & respected for years at a stretch, so that
you can enjoy the multifold benefits of the accumulated wealth in
your future! You can realize your goals with this wealth, which can
range from travelling the world to buying a house or car. Everyone
has a different objective behind their saved corpus, but the plans
they make are on similar lines. CRIF High Mark - one of the top
credit information companies in India, sheds some light on a few integral
parts of saving money that remain constant throughout. Let’s dive
into them:
Related
Reads: 5
Simple Steps to Create a Successful Monthly Budget
#1:
Get rid of your debt
It
is a simple calculation; the sooner you clear your debt, the faster
you’ll be able to direct a substantial amount towards your savings.
So, clear your credit card dues & loan EMIs on or before time so
that you can put that amount to secure your future needs.
#2:
Set aside a fixed percentage of your income for savings
Building
your savings is a serious task & for that you need to be
disciplined. Whether you earn Rs. 10,000 or Rs. 1 lakh per month,
always dedicate a fixed percentage towards savings. You could explore
various financial instruments to invest; anything between stocks,
mutual funds & fixed deposits. What’s important is to stick to
this percentage under any circumstances. If you have a salary of Rs.
10,000, and you decide to dedicate 20% of your salary to save, then
you should put in Rs. 2000 towards savings each month.
#3:
Stay away from luxuries you don’t need
There
are some luxuries that can be done away with as your other goals &
milestones in life take precedence. While some luxuries help you move
ahead in life, others could be weighing you down by being an unneeded
burden on your finances. Practice due diligence by trying to spend responsibly & keeping
as much as you can for your future corpus. If you are single &
planning to buy a car, reconsider its requirements against its
maintenance cost. Instead, start using carpool services or consider
the option when you buy a car. Similarly evaluate your other expenses
as well!
#4:
Assign goals & milestones to your savings
It
is very helpful when you add purpose to all your savings. Setting
goals & milestones only helps you gain clarity of the way in
which you need to drive your savings. Assigning milestones adds to it
for better judgement of the amount you need to save. Always dedicate
a particular savings fund to a goal like down
payment of a house, retirement
funds etc. If you are looking for a loan
to fund a new car or a new house, you will require a good credit
score to become eligible. Keep in mind that every financial action of
yours is either benefiting or hurting your credit score for personal loan.
#5:
Record & evaluate your expenses
Get
into the habit of maintaining a record of your monthly expenses. So,
by doing this, your evaluation process will be faster & more
accurate. You will be able to pinpoint exactly what is wrong or right
about your monthly expenditures. Take time to sit back & analyze
it every month to decide whether a change is needed or not.
#6:
Set your priorities
You
should be able to highlight your priorities & take a call on your
spending habits when necessary. Make savings your priority & be
ready to give-up on the momentary moments of happiness for the bigger
cause. Try to eat outside as little as possible & go on a
spending spree only when needed.
#7:
Create a financial plan
The
crux of the entire wealth creation game is to make a financial plan.
When you begin, you need to clearly identify your goals, expenses,
recurring bills & luxuries. Make sure that you do not dedicate
all your monthly income to these categories & set aside a good
chunk of money for savings. Occassionally perform a credit check so that you don’t lose track of your credit
score.
Keeping
a sound financial plan in place will not only help you manage your
expenses well, it will keep you out of debt & help in planning
for the timeline of the credit lines you may plan to pick up like a
home loan or a car loan. You will always be able to keep a check on
your debts, which means you will have a good credit score!
If
you are planning to begin your journey to wealth creation, do so by
checking your CRIF
Personal Credit Score here.
