SINCE many years I have been making relentless efforts to convince you as to how savings and investment is important not only to you as a person in your individual capacity but to the whole society per se. Domestic savings on the part of each citizen is finally channelled towards economic development of any country.
So if the domestic savings is big, then the Government has to resort to fewer borrowings to implement developmental projects in the country. Now you can imagine how important it is for each one of us to contribute towards boosting domestic savings.
Through my weekly money matters column, I don’t know how far I have succeeded in this mission of spreading awareness on savings and investment; however my passion to continue on the same path remains undaunted.
Although, I can very well understand the challenges faced by many small savers in the country, as for them the first priority is to feed their family well, rest everything become secondary. Notwithstanding the above, I am a firm believer that the only thing that remains constant is the change itself.
So with passage of time, prevailing conditions for every human being undergoes a change and this offers each one of us an opportunity to save for rainy days. This is the time one need to grab in order to harness the available opportunity, because time and tide never waits for anybody.
Thus when I advocate to “save money”, what I mean is the intension to do so on your part. Remember, if there is a will there is a way. Moreover, there are numerous innovative ways through which one can pursue their savings pursuit in life. Although we need to accept that there is no single panacea by which you can achieve the goal of having accumulated enough savings to take care of your future needs.
This can be achieved not by a single action but with permutation and combination of various factors. So if you are looking for a solitary solution to address your savings need, then it is futile to search for it, as it does not exist.
Therefore, let me take this opportunity to share with you some selected strategies or techniques whose effective application can make your job of saving money a bit easy.
The list goes as follows: Know your expenses: Disposable saving for any person is arrived at when total expenses for a period [whether monthly or yearly] is subtracted from the corresponding total income attributed to that period.
Often it is observed that we focus too much on the income part and ignores the expenses side, without clearly understanding its importance. If you know your expenses well, then you can easily identify which one is essential and which one falls in the category of luxurious or non-essential nature.
You can enhance your disposal savings just by controlling expenses which are marked as “non-essential”. Pay yourself first: In simple terms, “pay yourself first” meansbefore you pay any of your bills whether relating to grocery, entertainment, car loan, personal loan or making payment of any other nature, please pause for a moment and set aside a portion of your income to save.
The first bill you must pay each month should be to yourself alone and nobody else. This habit, if developed early, can help a person to build tremendous wealth during his/her lifetime.
It is not as difficult as we think it to be. Remember; when you set down to pay your bills of different entities, the first cheque you must write should be to yourself only. Avoid impulse buying: Make a list before going for shopping. They call it impulse buying for a reason.
Humans simply have a very tough time resisting the temptation to purchase extras while shopping. Without a list you will buy items that you simply do not need. Even worse is when you forget to purchase the actual item you came to the store in the first place. Getting all that you need in one trip can help avoid another unnecessary trip and further temptation to buy more.
Pay off your debts: World wide it is a universal practice that banks normally charge interest on borrowings at a higher rate than what they pay to the customers on their deposits.
So if you are servicing a debit which is inviting interest at the rate of 17 percent, then it makes lot of sense to utilize your entire disposal income on servicing of loan rather than utilizing part of this money to put deposits which may earn interest at the rate of 10 percent.
Thus, your first priority should be to achieve a debt free lifestyle by paying off all your outstanding loans. Control the menace of plastic money: The mere presence of a “Credit Card” in our pocket tempts us to spend more, as we feel there is no requirement for upfront payment. But at the end of the day this is in any case going to be the part of our expenses.
Therefore when we wade around with a credit card in our pocket, we need to behave more responsibly so as to avoid any unnecessary buying through simple use of a credit card.
Invest in your career–improve your skills/ competence level: We know there are professionals who command a very high price in the job-market, while on other hand there are also people who struggle to earn a small fraction of what the so called highly paid professionals make.
This wide gap represents their respective skills or competence level. Thus one of the ways through which we can enhance our potential to earn more is by continuously improving our skills or competence level.
Often we make the mistake of saving money at the cost of improving our skills. As learning is a continuous process, so never shy off to learn something new even at a cost, which is nothing but a long term investment on your part.
This list can go endlessly long but I need to conclude at some point. Remember, times are tough, money’s tight, and nobody should be spending more than they need.
If you think you’ve exhausted all avenues for saving a buck, apply the above stated simple techniques and I am sure the end result would be different. What basically required is a firm commitment on your part. Are you ready to pledge your commitment, if yes, the success is guaranteed. Cheers!!!