The biggest problem people face while saving is that whatever amount they plan to save; at the end of the month they will find that they don’t have that much money left with them. Not only this at times you might to borrow and do not have enough cash. Most of us have faced such situation and find this very frustrating. In case we have a limited income and with the perspective of the future lying ahead of us we need to plan well in advance and saving is definitely most effective way to deal with uncertainties in life.
Spending and then hoping to save is the trap we fall most often. We need to understand that this is not best method to save money.
THE BIGGEST TRICK IN SAVING IS THAT YOU NEED TO SAVE FIRST AND THEN SPEND.
I have faced the saving dilemma in my life and started saving only when I reverted the approach to saving. From spending first and then saving I tarted saving first and then spending. It worked wonders for me. With a small salary it is very important to save because emergencies may catch you off guard any moment if you are not prepared.
Saving in a piggy bank is not very effective method because you end up breaking it the moment any need arises. Do not go for piggy bank unless you have got a strong will and determination to not spend your saving. Giving it to some relative or friend is also not advisable.Because they might spend it and it will be hard to get back your original sum also.You might try to put it in fixed deposit or open up recurring deposit. Recurring deposit s better in these two as it puts you in the habit of saving regularly.You might put it in an endowment insurance policy.It is better because it will not return you some money but also cover the risk for you. Or better still you can go for a Unit linked Insurance plan(ULIP).This will give you better returns and as well as risk cover up to an extent.
Now the bigger question is how to carve out the saving from your earnings every month. You need to write down all your basic expenses for month. You will figure out the largest part of your income might be going towards these things Residential(in case you are on rent), travelling, food or education( in case if you have kids). Point out all of without which you can carry out your normal activities.
Best way to do is to ask yourself for each and every expense ” Is it really required to spend on this?”
Prioritize you expenses and you will come down to and estimate which you can save beforehand every month . Keep 10% more than what all zotted down basic expenses as exigencies come out every time and you must have some cash to meet them. apart from this plan the rest of the money to be saved every month. This amount must be saved before all your expenses every month. Try to put all your premium and savings date just after you receive your income . This will hep you get out of the excess expenses trap and will help you to save money.
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