World Savings Day -- a day devoted to the promotion of savings -- is celebrated on October 30 all over the world. The day highlights the necessity of savings for the future. Savings is imperative as it helps us in meeting financial commitments at a future date, for example, to buy a house or a car.
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Put simply, savings represents an individual’s unspent earnings. It is the amount that remains after meeting the personal expenses over a given period. The funds saved or set aside enable us to stand against unforeseen emergencies.
Besides savings, it is equally important to focus on developing practices that can help us in ramping up these savings and thus ensure a secure financial future.
But, how can we do that?
Here are key tips to follow:
Set a purpose
To begin with, you should set a purpose before starting to save. That could be the aspiration to buy a new gadget, home, or save money for future contingencies.
Once you are clear on the WHY part, it will be easier to be disciplined about the practice.
Keep a check on spending
Keep checking your unnecessary overheads and spending where it’s needed rather than splurging money on the salary day when it can be saved for better purposes.
Mayank Goyal, founder and CEO of moneyHOP also suggests individuals make sure they don’t spend more than they earn.
"It is useful to develop a habit of budgeting from an early age. The first thing to consider is to look through what they have spent in the last few months and become aware of top expenses. This exercise itself can be quite revealing and can point one in the direction of where they can save more. A healthy savings rate is around 30-35 percent. Savings should not be what is left in the bank account at the end of the month but rather something one can do as soon as they get the paycheck," Goyal said.
Do smart spending
No matter how hard people try, they cannot completely reduce spending to zero. But one can spend smart by using online payment apps and making use of vouchers and cash backs which in a way help in savings while spending.
Start investing too
The only way to see the money grow is by investing it. So, you should not only save but start investing too. And, this must be done early so that time works in your favour.
The earlier you start, the longer you can compound money. According to financial experts, first-time investors should spend generous time on educating themselves about an investment before taking the plunge.
"Start small and build up, work towards an achievable goal, if a big long-term one seems overwhelming. And if you have a child in your life whose money personality you might be influencing, make sure you help them build a strong financial foundation by helping them become financially literate in their early years," said Gyan Tiwari, Founder, Education10x at BrightCHAMPS.
(Edited by : Priyanka Deshpande)
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