How to save money
- A Complete Beginner's Guide to Saving Money.
- How to save money from salary.
- How to save money in India.
- How to save money as an investor.
- How to Save Money at Home.
A Complete Beginner's Guide to Saving Money.
In this article, you will learn about saving money and will also teach you how to position yourself financially to get the most out of your invested life.
Every rupee is an investment in the quality of your life.
Make a cash cushion of 3-12 months of income before investing.
Track your spending in writing it or using online tools to help you.
Being cash efficient is an important step before starting an investment. While it is right that you want to jump into the market and get your money, it can be dangerous. A successful investor understands that in the short term your investment can reduce money.
When we talk of investing, we recommend a long-term purchase and philosophy. If you put all your cash in the market, then you may end up needing it in the near future. The market can come down to that level, which means that you will have to sell your investment to make up for the loss. If you have a cash pillow, you can keep your investment intact and wait for it to recover.
Therefore you should try to make cash efficient of at least three months' salary.
This may sound difficult, but it is easy to train yourself to save money, and once you get used to doing so, you will enjoy looking at your account balance every month.
4 Tips to save money
Retire short-term loans
If you are paying a higher interest rate on a credit card, then you need to withdraw that loan. You cannot build long-term money by paying up to 20% on short-term debt.
Treat every rupee as an investment
This is an important consideration if you want to become a successful investor. An investment is more than just shares. We invest every day. Some of these are significant investments, such as the roof over our heads. Some of these are trivial, like a new pair of sneakers that you don't really need.
The next time you take out your credit card, ask yourself, "Is this the best investment I can make with this money right now?" Don't carry your wallet with you all the time. Practicing this routine can help you a lot in saving money and you can easily save a lot of money.
Track your expenses.
Sometimes come at the end of the month and wonder where all your hard earned money went? It happens to all of us.
A good way to deal with this is to start keeping an eye on your spending. There are many apps available to keep track of where your money is going. You may be surprised to realize how much you spend going out to lunch every day, or when you get that extra coffee cup in the evening.
Disciplined Saving & Investment
The main rule to keep your money corpus safe is to invest consistently. Stay focused on your investments and maintain discipline in the way you invest. Withdrawing some amount every month will not make much difference to your monthly income. It would be better for you to save a few rupees every month than to withdraw the money collected for big investments. Saving money by being disciplined will increase your net worth
Sticking power of rupee
Investment experts suggest that one should always start investing early, one of the main reasons for this is the advantage of getting compound interest. Let us know this with an example.
Prasoon (A) starts saving Rs 1,000 every year from the age of 30. While
Prasoon (B) also saves the same amount but from the age of 35.
When both get their invested money at the age of 60 years, the fund of
(A) is 12.23 lakhs and
(B) only 7.89 lakhs.
In this example, we can assume a return of 8%. So it is clear that the difference between the initial investment of Rs 50,000 makes an impact of more than Rs 4 lakh on the final fund. This is due to the power of compounding the rupee. The longer you invest, the higher the return you are likely to get
Now suppose (A) instead of investing 10,000 every year, he invests 50,000 every 5 years from the age of 35, in which case his invested money will remain the same (which is 3 lakhs) but he will not have to invest Rs. 10.43 lakh in fund(s). This shows that even after putting the same amount of money in late investment, one loses out the benefit of compound interest initially.
Other Benefits of Saving
- There is no tax or fee for putting in or withdrawing money in SIP investment.
- There is no tax or fee for investing or withdrawing money in SIP investment.
Often the tax on capital gains depends on the time of investment and for how long the investment has been made.
These are some of the given tips, following which you can increase your net worth, for this it is very important to save and invest it in the right place.
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