Skip to main content

Increase your Savings

 

Increase your savings

 

We have all heard stories of our parents or grandparents putting away money in tins, envelopes and savings accounts. Indians are known to be big savers. That is one of the reasons why the 2008 global recession did not affect us as much as it did people in Western countries. Savings have more or less worked as a great way of safeguarding one's future, until now. With the increasing cost of living, the old methods of saving seem to be falling short of our expectations. Are we letting our standard of living eat away our retirement money? This is one question every person faces sooner or later in life.

As a thumb rule most of us keep a certain amount of our income aside as savings. This is usually between 10 to 50 per cent of the earnings depending on the lifestyle. We assume that if we start saving in our twenties we will have a sufficient amount saved by retirement. However, by the time we near retirement our standards of living are so high that the saved amount seems inadequate.

It is a fact that people who save and invest regularly are better off than those who do not. But merely saving is not enough. One should increase one's savings with proportionate increases in salary.

After living a certain way during one's working life, no one wants to cut down on the lifestyle, especially after retirement, when one should be enjoying it the most.

Put the extra money to good use: Every time we get a hike in our salary we start expecting more out of life. We suddenly shift our focus to our ' wants'. We tend to become lax with our expenses. Knowing that we are saving a portion of our money gives us a sense of satisfaction.

But just as the increment in salary, savings too need to increase. This will help to take care of the change in lifestyle that the increment may have brought about.

Decide how to spend the increment carefully. It can be either a lump sum amount or it can be additional monthly savings. You need to ensure that the additional money in your hand is being used for securing a better financial future and not only to upgrade your lifestyle.

Many of us don't realise that in spite of getting a raise in our salaries, we are still putting aside the same amount in savings we used to when we initially started. We spend most or all of the increment on material things. Instead of focusing on what we are saving, we should focus on what we are spending most of our money on. If we take every hike in our income as something we can freely spend, we will end up saving a very small amount of the total money we earn on an annual basis.

To see the exact difference, calculate how much you earn every year and how much of it you are able to save.

Here is an example.

Imagine you were saving 5,000 every month from your total income of 50,000. After a year your salary increases by 15 per cent and goes up to 57,500. You are still saving the same amount, that is, 5,000 and the rest is going towards lifestyle expenses. If 10 per cent of the income was what you initially saved, it has now gone down to about 8 per cent because 5,000 now is about 8 per cent of your revised salary. Although, you have more money in hand you are unable to retain it for a better financial future. And if this goes on every year you gradually get into a pattern where it becomes difficult for you to spare any extra cash. And with this pattern going on throughout your life you reach the retirement age feeling unsure how to make ends meet.

Follow these simple rules when you receive an increment and/ or bonus: Figure out your savings percentage (not an amount) of your monthly take- home and stick to it. If you emphasise on saving first then spending for expenses, you will build a healthy habit of securing your future Track your expenses every year.

The rate at which they are going up is the rate at which your savings should grow Keep a tab on financial goals and how your savings are helping you achieve them Keep a tab on fixed expense and variable expense items. For example: The equated monthly instalment doesn't change unless you want to change it. Household expenses, school fees, domestic staff are all fixed on an annual basis. Eating out, holidays, shopping, festivals expenses can vary based on your focus on ' wants'. You can set a limit to increase in variable expenses. Any increase in salary can be divided proportionately to increase in savings and expenses and subsequently to proportionate increase in fixed and variable expenses Understand the power of compounding.

Compounding returns can create a huge corpus even if the amount being saved is small but held on for a very long term Understand the cost- benefit analysis of using the lump sum to pre- pay any loan or investing the money for future financial goals.

Although it is hard to save money during the initial stages of your career, allowing yourself to spend just 50 per cent of the raise you get every year can work wonders.

Before you start dreaming big, you should have something to back it up with. Personalise your lifestyle in such a way that it creates a balance between what you have and what you intend to have in the future. Anyone who masters this quality will be able to maintain a consistent standard of living, not only while working but even during his/ her retirement.

For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call

Leave a missed Call on 94 8300 8300

Leave your comment with mail ID and we will answer them

OR

You can write back to us at

PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest Mutual Funds Online

Invest Any Mutual Fund Online

Download Mutual Fund Application Forms from all AMCs

Download Mutual Any Fund Application Forms

---------------------------------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Franklin India Bluechip
      4. ICICI Prudential Top 100 Fund

B. Large and Midcap Funds Invest Online

      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
      4. Birla Sun Life Front Line Equity Fund
      5. Franklin India Prima

C. Mid and SmallCap Funds Invest Online

      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
      5. Birla Sun Life Dividend Yield Plus
      6. SBI Emerging Businesses Fund
      7. HDFC Mid-Cap Opportunities Fund
      8. ICICI Prudential Discovery Fund

D. Small and MicroCap Funds Invest Online

      1. DSP BlackRock MicroCap Fund
      2. Franklin India Smaller Companies

E. Sector Funds Invest Online

      1. Reliance Banking Fund
      2. Reliance Banking Fund
      3. ICICI Prudential Banking and Financial Services Fund

F. Tax Saver Mutual Funds Invest Online

1. ICICI Prudential Tax Plan

2. HDFC Taxsaver

      1. DSP BlackRock Tax Saver Fund
      2. Reliance Tax Saver (ELSS) Fund

G. Gold Mutual Funds Invest Online

      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund
      4. Birla Sun Life Gold

H. International funds Invest Online

1. Birla Sun Life International Equity Plan A

2. DSP BlackRock US Flexible Equity

3. FT India Feeder Franklin US Opportunities

4. ICICI Prudential US Bluechip Equity

5. Motilal Oswal MOSt Shares NASDAQ-100 ETF

Popular posts from this blog

ICICI Pru Mutual Fund Dividend

ICICI Prudential Mutual Fund has announced dividend under the following schemes: Scheme Dividend ( Rs /unit) ICICI Pru Capital Protection Oriented Ser V Plan B-D 0.03611325 ICICI Pru Capital Protection Oriented Ser V Plan B Direct-D 0.03611325 ICICI Pru Balanced Advantage Direct-DM 0.06 The record date has been fixed as February 08, 2017. ------------------------------ ------ Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGetRich on 94 8300 8300 ------------------------------ ------ Leave y...

What is Financial Freedom?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India)     There were many things common between our Freedom fighters. All had the Single vision (Free India), common goal (independence) and had a disciplined and focused approach. They were ready to do anything and everything and had made so many sacrifices to see India free . But the road to freedom was not easy .They had faced lot many hardships, went to jail so many times and even confronted physical and mental torture from the British. There was one more thing which proved to be an advantage to our fighters that most of them were professional lawyers. The knowledge of legal issues and its impact on our country at large has helped them counter various bills and proposed new laws by the then government. It is due to their continuous effort that we are able to achieve the goal of Independent Indi...

Hidden Bank Fees

  What Banks Hide From Customers Imagine after a peaceful and exciting holiday you receive your bank statement with steep charges. You then rush to your bank and start confronting staff members and to your dismay, you come to know that the high end debit card was charged very heavily. Wouldn't this cause damage to your finances? So remember, the world outside is full of deceptive and double cheating people. Unethical practices are always used by company sales person in order to meet the target. Credit card companies, mutual funds and bank institutions always play dirty tricks to lure customers and the practices are rampant. So here's how you should be careful while dealing with your banks: High End Debit Card Charges While opening an account with a bank you opt for a debit card with minimal charges. But later on when you upgrade your card and opt for high end debit card the annual charge rise by a good amount. Though such a card has slew of features but it all comes at a high ...

Partial withdrawal from PPF

  Public Provident Fund (PPF) account has a lock in period   If you opened a PPF account to meet your retirement needs,, think twice about withdrawing from this fund before retirement. But provided it's an emergency here are the rules. Public Provident Fund (PPF) account has a lock in period before which you cannot withdraw your money.   The partial withdrawal is allowed after the completion of 6 financial years . This means that you will be allowed a partial withdrawal from 1 April 2017. The maximum partial withdrawal allowed is the least of the following: 50 percent of the account balance at the end of fourth financial year, 31 March 15 50 percent of the account balance of the end of previous financial year, 31 March 17.   There's a loan option available on your PPF account between the fourth and the sixth financial year. You can obtain a loan of up to 25 per cent of the balance in your account. However, this will attract interest of 2 percent more than the prevailing ...

Updating a minor PAN card upon becoming adults

  Updating a minor's PAN card once they become adults A PAN card issued in the name of a minor does not contain the minor's photograph or signature, and therefore, cannot be used as a valid proof of identity. Once a minor PAN card holder turns 18, the relevant changes must be made in the PAN records. A new card is then issued bearing a photograph and signature. Application The applicant is required to fill up the "Request for new PAN card andor changes or correction in PAN data" form. The form can be filled up online by accessing NSDL's Tax Information Network website and clicking on the online PAN application tab. Information The applicant must mention the existing PAN number in the application and check the `photo mismatch' and `signature mismatch' boxes, and submit the online form. The form must also be printed out, signed by the applicant, and submitted along with two photographs. Documents Identity and address proof in the form of a copy of the app...
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now