Skip to main content

5 ways to encourage yourself to Save More

We Indians have always been good savers with our gross savings rate at 31% of GDP in the year 2016. Savings rate is the share of gross savings in Gross National Disposable Income (GNDI). But, as per IMF(International Monetary Fund), its gross savings rate has actually fallen from 37% in 2007-08 to 31% in 2016.

                                                                                                           (SOURCE: DBS Group Research)

This decline in the savings rate is a gradual decline which could be due to multiple reasons like low income, high expenses, tough economy etc. Household sector is highest contributor to the gross savings. In household sector, there has been decline in savings in the physical assets and increase in savings in financial assets, but the share of financial savings is still too low. Let’s look at the ways in which we can encourage ourselves to save more in financial assets.

1.       LEARN
We normally tend to avoid something we don’t understand. And with variety of financial products available at our disposal, one obviously gets confused. Many a times we blindly follow our friends and relatives for investments and then burn our hands. The key is to learn, understand, and then take action.

2.       SET GOALS
You just have a fair idea that you need to save. Having no specific goal in your mind does no good benefit, it rather distracts you from saving. Create realistic goals to give purpose to your savings, be it buying a new car, saving for vacation, or your retirement. To see your savings, grow and meet your set goals will be a real motivation to save more.


3.       AUTOMATE YOUR SAVINGS
We are living in digital space these days with the world in our mobile phones. Then why not bring this automation in our savings as well. You can set an auto-debit from your bank account towards your savings fund for the required date. By doing this, your money will get invested automatically on a pre-set date every month. It will save you the hassle to getting to do the work yourself, and you won’t even know that you have shifted to INCOME-SAVINGS = EXPENSES mode.

4.       STAY IN CONTROL
As per research, people who feel powerful around money are much better with their money decisions. There is no need to fret if you have made some wrong financial decisions. You can always sit back, think through, and take corrective action. It will not only enable you to save your money but will also give you a lesson with regards to your future savings.

5.       KNOW YOUR FINANCIAL APPETITE
We all are different individuals with different choices, and the same relates to our savings as well. Some of us are risk-takers and some of us prefer risk-aversion. Only if you are comfortable with your portfolio instruments, will you invest more. In the long run, equities have performed much better than any other asset class. Having little bit of equities in your portfolio will only benefit you provided you stay invested for the long term. Seeing your money grow will obviously nudge you to save more.

Saving money for your future is important. Once you are in savings zone, you will be having money for all your important milestones like kid’s education, your retirement, or any other goal that you need money for. You just need to know what motivates you to keep saving.


Charu Hastir, CFPCM is founder of http://www.theriteplan.com/. Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit: https://theriteplan.com/index.php?route=common/home/
Labels:

Comments

Post a Comment

Popular posts from this blog

Why your Financial Plan is always Work in Progress?

Ever heard someone saying, this is my last month in the Gym, after that there is no need for me to workout ever again…I will stay fit for the rest of my life without any fitness regime. No one can retain the perfect physique forever without exercise. It is always a constant effort to stay at the desired level for almost anything that you think of. You cannot be a great chef without trying out new recipes, you cannot be a great marketer without adapting to new marketing strategies, you cannot be a great fashion designer without adapting your fashion sense towards the trending styles. Leave all of this, you even cannot even think of becoming a good parent if you don’t change from old tricks to new methods for upbringing this generation kids. If you have to upgrade your act with every other thing in life, then how your investments could be any different.
The Financial Planning Process has 6 broad steps with the last one focussing on the importance of monitoring and revision of the plan …
Post a Comment
Read more

Union Budget and Your Financial Plan?

Honorable Financial Minister Piyush Goyal presented this year’s Interim Budget on 1st February 2019. Every Year, on the day of the budget announcement, you can see almost every individual glued on to their Television or mobiles to check the budget updates with much excitement. Sometimes the Budget announcements cheer us and sometimes they make us sad as we think that there are not many benefits being offered for individuals in our tax slab.

Budget is also referred as Annual Financial Statement as it contains an extensive account of the Government’s finances i.e. Government’s revenue and expenditure for the fiscal year. How relevant is this budget when it comes to our personal financial savings? Should we wait for the Budget to be announced and then start our investments or should we do our investments without any relevance to the Budget? Let’s discuss this in detail.
Budget helps in Tax Planning

Budget surely helps in planning the taxes for the next financial year. Budget is presente…
Post a Comment
Read more

What to do when Stock Markets suddenly go up?

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

This May we have seen BSE SENSEX moving from the levels of 39,031 on 30th April to 37,090 on 13th May and then back again to 39,352 on 20th May. Such volatility in such a short period makes us doubt our investment decisions and questions our long-term plan of staying invested in the equities. This Market volatility has the power to change our investment strategies and at times even question it. Sometimes we think that we have missed a golden investment opportunity and on other times we assume that we have invested at a very bad time. At the very best it keeps us confused on our next steps.
John Maynard Keynes has rightly said that "Markets can remain irrational for longer than you can remain solvent." But how should we treat our investments when we come across such turbulent times and what is the right course…
Post a Comment
Read more