Money isn’t everything, but it can impact personal well-being. Although enough money can be made, creating a savings plan and sticking to it can be difficult because many people can’t resist the temptation to spend too much on things they don’t. they don’t need.
What do Indians buy with their money?
• 30% of Indians say they cannot afford to go on vacation.
• 1 in 3 Indians in central India say they cannot afford to eat in restaurants, compared to 1 in 10 in western India.
• 35% of unskilled Indians and 10% of master’s graduates say they cannot afford to eat out.
• 70% of Indians spend less than Rs 1,990 on online shopping on a monthly basis.
These statistics show that saving is a necessity and one cannot say no to saving as it can help to live the lifestyle one desires while acting as a savior in times of financial emergency. Even today, 50% of Indians save between zero and 20% of their income, and 20% save between 20% and 30% of their income. According to a survey conducted by PGIM India Mutual Fund and Nielsen, more than 51% of Indians have no retirement plans at all.
People find it difficult to save in general, and especially to stick to a savings plan. However, many people are still unaware that creating and sticking to a budget can help pave the way to a successful financial future.
The jam jar method, which involves dividing money into separate jars to cover various expenses, is one of the most effective ways to save money. The pot method is a great way to make sure your bills are paid and your money goes towards the goals you have set for yourself. Saving pot can actually help someone plan their goals better.
A savings jar is similar to a piggy bank in that you set aside a portion of your income to save for a vacation, wedding, or other financial goal. This ensures that you have saved a certain amount of money from your income and that you will not have to spend money from your income or other investments.
A savings account can help you achieve your short and long term goals. Even as children we were taught the value of having a piggy bank, but we should also teach children the value of having a separate bank for each goal so that they can meet their financial needs and get through easily. the hard times.
Benefits of having a savings account
If you’re planning a vacation, a wedding, buying a car, or any other financial goal, here’s how opening a savings account can help:
Track your progress by: Having a single savings account means you’ll see all your saved money in one place and won’t be able to tell the difference in an emergency or when trying to reach a goal. With separate accounts, you can see that you have Rs. 10,000 set aside for your car purchase, Rs. 5,000 set aside for gold purchases, and Rs. 1,00,000 set aside for your wedding – this way you can better understand how much more you would need to achieve your goal based on your priority.
Start saving more money: For example, if you already have one lakh saved for wedding expenses and you need another 50,000 in the next three months, you will need to borrow $50,000.
Easy access: Creating, maintaining and liquidating a kitty is now simple thanks to the online banking services offered by banks and the growth of neo banks. You can open a savings account for each goal. Alternatively, you can invest in stocks to achieve long-term goals and in fixed deposits or non-convertible debentures to achieve short-term goals.
Reduce temptation: Keeping all your money in one place makes it easier to overspend. For example, you may intend to save for both a car and a gold purchase in the same account, but when you buy gold, you end up spending all your money on gold and it doesn’t you have more money left over for the purchase of a car. Setting separate goals in this way can help ensure that you are setting aside some of your money to achieve your separate goals.
Saving provides more incentive to stick to a financial plan; it allows you to plan well and save enough for the future without incurring loans or personal debt from family and friends. Also, if you think leaving your money in a savings account will yield no return, you can diversify your investments by saving in areas such as life insurance, non-convertible debentures, PPF, etc. However, keep in mind that every investment should have a specific purpose and you should avoid early redemptions to ensure you can save and avoid associated redemption fees.
(The author is the founder of Credit Fair)
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Posted: Sunday, January 30, 2022, 07:00 IST