How To Save Money

At times the difficult thing of saving money is to get it started. People generally find it difficult to figure out ways on how to save money and how to utilize their savings to pursue their Financial Goals.

Here are few tips for how to save money:

Keep track on your Expenses

The every first important thing of saving money is to figure out how much money you spend. Keep proper track of your expenses to find out what expenses you can cut down.

Spend what is left after saving

Warren Buffet has rightly said “Do not save what is left after spending but spend what is left after saving”

First keep 10 – 15 % from your total income aside as your savings and cut short all the unwanted expenses and inculcate good saving habits

Make your Savings grow

Don’t just blindly keep aside the money as savings but make sure that your savings are growing so that you have enough money to buy a house 10 years down the line or even a car in next 5 years or you have enough funds to meet your financial goal in near future

Save for an Emergency

In the lure of making money and saving for bigger goals do not forget to prepare for financial contingencies. So it is necessary to build an emergency corpus, it should include 3-4 months of your household expenses and should also include payment of EMI’s and other such obligations. In fact this shall be the 1st step for money to be saved

Which investment shall you pick to save your money?

One shall select an investment option depending upon the type of goal and the tenure of achieving that goal:

  • Do a monthly SIP in Equity Mutual Funds to inculcate good saving habits.
  • Invest in Equity Mutual funds to gain higher returns and have a goal which is to be achieved in long term.
  • Invest in Balanced Mutual Funds to achieve a goal in next 3 to 5 years tenure and avail benefit of withdrawing money as and when required.
  • Invest in Debt Mutual Funds if you are saving money for the tenure of 1or 2 years and avail benefit of withdrawing money as and when required.
  • Invest in Fixed Deposits if you wish to play safe and do not want to take much risk and want to build a corpus for emergency.
  • Invest in ELSS fund and avail tax benefits u/s 80C with a lock in period of 3 years.