“Do not save what is left after spending but spend what is left after saving.” – Very aptly said by Warren Buffet. Investment is a differentiating habit of all self-made billionaires. But before investing let’s learn about the habit of saving money. Only after you inculcate the habit of saving, can you start investing and securing for your future financial goals and aspirations.
Let’s discuss 4 habits that will help you inculcate the habit of saving which you can then invest and grow:
• Saving Goals: One should always save first and then spend to avoid overspending. As soon as your salary gets credited, you can give standing instructions to the bank to invest in the preferred means which will help your grow.
• Always Track Your Expenses: Minimising unnecessary expenses can be done if you keep a track on your daily expenses. Create a budget for each expense and see if it can be reduced by any means and stick to that budget. Separate your needs from your wants.
• Keeps Your Goals Realistic: Often recommended is a 50/30/20 way in which, 50% of your income you spend on your essentials like food, rent etc. 30% of the income on entertainment and lifestyle expense and 20% savings. Don’t impose very strict saving rules. Always give yourself small rewards which will help you inculcate the habit of saving. Even a small amount saved is a first step towards your future savings pot.
• Invest Your Savings: If you keep your savings with you, you might spend it on something which is not important. Thus, you should invest your money in avenues like mutual funds, fixed deposits etc, as that will save as well as grow the money.
The Pandemic has promoted us to focus on our savings. Save whatever small amount you can as during the course it will get you closer to your goals.