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

What is Financial Planning?

What is Financial Planning? One of my friends came to my place for a cup of coffee and while chatting over how life is going, where is it heading, he told me that his elder daughter wishes to go abroad for her graduation. And when I asked him that how is he planning to fulfill her wish, he just laughed it off saying that her graduation is 10 years away, why should he get worried about it now. This attitude of his made me think about the importance of planning ahead of our financial goals and how many of us are conveniently ignoring this very fact. The Term Financial Planning defines itself as planning your finances well. It is a perfect marriage between your finances and your life goals. Efficiently managing your expenses and savings in order to achieve your future goals is nothing but Financial Planning. What are future goals? They differ from person to person. Some might want to take a luxurious trip abroad and some might wish for own home. But there are few goals which m
9 comments
Read more

Should you start Big when it comes to your investments?

The other day I met a Startup entrepreneur who was just talking about the importance of starting and that also starting big. As per him, a small game or investment had more chances of failure in comparison to playing big. I could understand being an entrepreneur myself that he is only thinking about launching big obviously with the backing of some deep pocketed private equity firm. But hey, I have also seen start ups who started small and made it big eventually slowly and steadily step by step. Same is the case when it comes to investments. Should we start only when we have a big chunk sitting in our bank account or should we start small in systematic manner slowly accumulating our wealth. Let’s hear out some benefits of investing regularly rather than waiting to strike gold with the larger chunk of money. 1.        Less fear of markets If you are a regular investor who invest systematically, you don’t need to time the markets as your investments are going to the markets
2 comments
Read more

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 t
Post a comment
Read more