It is much easier and enjoyable to sit back and spent all the money every month, purchase whatever we want and forget about the future living in the present. Between today and the end of earning days, a lot more can happen- we might face a decrease in the salary due to the recession, can even lose a job or can be admitted in the hospital. Our life is full of uncertainties. Hence, savings become necessary not only for retirement purpose but also for precautionary motives as well. But the question is how and where to save. Here are some effective ways on how to save money for the future.
1. EVALUATE AND SET REAL GOALS
The foremost step is the evaluation of spending and allocation of income earned to know that where the money is actually going. Budgeting can be intimidating but it can be helpful too. The next step is to cut down on the unnecessary stuff that are hampering the savings. One should always have a plan for the future and dependency should be minimal.
2. BECOME DEBT FREE FIRST
Planning a budget and sticking to it will allow the person to save more but the target should be in accordance with the lifestyle that can be achieved to induce more savings in future rather than discourages it. One should think in the long-term perspective and become debt free as soon as possible for higher savings.
3. GIVE BANKS, YOUR WORK TO SAVE
Automatic saving techniques used at the commencement of the month are more efficient than the likelihood of no money left to save at the end. One great thing about online banking is that for almost everything, you can set it and forget it. Allocating 10% of income to the retirement fund, 6% to down payment may allow creating automatic savings without releasing about the deducted income. One can increase the savings in recurring deposits also using the same to get the interest rates given by banks.
4. MONITOR WORTHINESS OF YOUR JOB
The most primary yet the most fundamental aspect of savings is income. The more the income is, the more will be the savings and hence more investment. So to save more one should constantly evaluate the job and salary paid for the work. If your work is worth more money, then switching to another job may work and can motivate for higher savings too.
5. USELESS CREDIT CARDS
Spending can be limited by more usage of debit cards and cash limiting the credit cards and tracking the bills and transactions made. Generally, human tendency allows buying more with the credit cards which are not needed also.
6. INVEST WITH THE GOVERNMENT
Investing in GIC, stocks, bonds and mutual funds may help the people to save and gain. But a risk-averse person can always opt for safer schemes by the government like 8% returns taxable bonds (2003) with no investment ceiling and lock in for 6 years or can go for post office time deposit account (POTD), 5 year NSC, Kisan Vikas Patra etc which are safer and relatively higher returns giving schemes than standard recurring deposits in the bank account.
7. GO FOR PRIVATE BANKS
Not only the government but private banks in the competitive world are trying to provide extra benefits to consumers to have an edge over the others. Even various banks provide the higher rate of interest on savings accounts in comparison with the other banks.
iWish accounts by ICICI bank allows the person to save for his/her desirables. Suppose a person wishes to save for a car worth 7 lakhs can open an iWish account and can save for it with the interest being received similar to fixed deposits.
Money maximiser facility by HDFC bank is a facility wherein consumers can set up a limit say 1 lakh in the saving account. If balance increases above then it the balance above limit automatically moves into the maximiser account to earn FD returns.
Overdraft facility by yes bank in which while earning higher returns on a fixed deposit, the customer can also enjoy liquidity by withdrawing funds up to 90% of the fixed deposit value through an overdraft facility. They need to pay interest only on the amount withdrawn and continue to earn interest on 100% of the FD.
By budgeting and becoming cautious about the unpredictable future, one can definitely save and make the life experience better for the future.
These were some of the ways on how to save money for the future, there are multiple benefits of saving money. How you save money every month, do let us know in the comment section.
8. KNOW THE DIFFERENCE BETWEEN NEED AND WANT
Always know what thing will be the best for you. Always be able to differentiate between your need and want And you can save a lot of money. “Need” refers to the things that you cannot live without while “Want” refers to the things we do mostly to show off on social media. For eg, having a proper meal at home is fulfilling your need while having brunch at a posh restaurant refers to subsiding you Want. know the line between the Need and want and you can yourself see stacks of cash in your account! 😛