Earlier, most people used to save money on retirement and emergency expenses. However, now the focus of the people is on financial planning and investment planning. Now people have started relying on Financial Independence and Wealth Creation. Financial independence is not just about managing funds for your expenses, but also about saving and investing. That is, if you are able to save a part of your earnings and also invest, then it is financial freedom. People should start for saving, no matter how small the amount is, because the savings made from small amount will become big amount in the long term.
Savings are made in the form of cash or liquid assets in safe securities, while the investment is long term process which includes the purchase of stocks, the purchase of real estate and fixed assets. It is important to have an understanding of the options for investment, but to save, just keep a record of your expenses, assess each month’s savings, reduce expenses, set a savings target, disseminate financial priorities and track the growth of your savings Have to do.
APY: Monthly pension will be Rs 5000 with daily savings of Rs 7, 2.8 crore people have been registered
This is how you can save
- Assess your source of income.
- For essential and regular expenses like house rent, utilities and health expenses, keep the funds aside.
- Set aside some money for some expenses like holidays and movie outings which are also often irregular.
- Keep the remaining amount as a savings.
Keep focus on budgeting
How much you are saving or can do, the most impact on the budget. By making a budget, you can continue saving and investing on spending accordingly. Apart from this, there is a need for strong will for not spending on unnecessary things. Follow ABCD’s mantra for successful savings.
- A- It means arranging income, expenses and savings.
- B- Budgeting and balancing expenses according to income.
- C – Consistent approach to savings
- D- Developing short-term savings into long-term investments.
The youth should make regular habit of saving a part of their earnings. For this, the youth should track their expenses and analyze it regularly every 15 days. With this, one should try to check the unnecessary expenses and control it over the next 15 days of the month.
Easy tips to save money for the younger generation
- Learn self-control and make savings a habit.
- Learn to divide your capital into several parts and allocate your entire earnings to many heads.
- Start with a small investment and analyze the payoff.
- Start an emergency fund.
- Earn, save and spend. Make the best effort not to use credit.
(Article by TV Raman, Professor, Finance, Amity Business School, Amity University)