22/10/2016
PAY CHECK TO PAY CHECK:A new artice on Personal savings
'My Paycheck to Paycheck'
As I scramble for ways to save my notes, the prices soar every month and I really can't skimp on my expenses. While I read bizarre money saving tips on the Internet,I know it is just a trap to save now and spend later in the future. When I listen to 'Make every rupee count' advices, I know I can't count every rupee passed over counters to save my life.I really don't let 'Brands','Discounts' or 'Less price'tags interfere my buying decision. The truth is all the money you save today,actually don't pay in the future.
The real question is 'How to make a big fortune by not counting notes at present'? How often do we realize it takes money to make money? It is time to work on creating a cushion of cash while resting on a rocking chair,to cover financial needs of future. I decided to work on facts and figures to change the way I think about money.
1. Why to add,when you can multiply?
When you just save,it costs you more than you can ever imagine. The meagre interest you earn out of your money locked in savings account has less or no potential growth than rising inflation. When you work hard to accumulate money,let your money work hard to take care of your future needs. Become familiar with the word "Investment" to plan a better retirement life.
2. Insurance is a policy,not a Fixed deposit.
An old gentleman once asked me,When you pay vehicle insurance premium without expecting an interest, why do you expect interest for a Life insurance policy? After all your life is more important than your vehicle. Does it ring a bell? Always opt for a term insurance with a minimal premium of Rs10000/year for a 3 crore policy, which has no maturity value than paying Rs 50000/Year as premium for a 30 Lakhs worth policy,which pays interest on maturity. It is better to leave behind 3 crores for your family than 30 lakhs,which may not match the inflation rate after 30-40 years.
3. Encash your hobbies
If you are a happy wife,a mommy or a frustrated IT employee, you should learn to make money from your passion,which is less demanding and interesting.With good expertise, marketing skills and minimum investment, you can become a successful entrepreneur. With access to good tools such as online tutorials,Youtube videos and google,to encash your hobbies ain't a Himalayan task.
3. SIPs and Investment strategies:
It is not easy for us to cultivate habits in general. A systematic rather a disciplined approach should be followed to develop the habit of investing. When you invest a sum of money systematically every month, you wil not be exposed to market volatility or growing inflation. Do good research on markets and best SIP plans to invest systematically.
4. Never underestimate the power of small amounts:
You should continue to hold on to traditional forms of investment such as Fixed deposits, Recurring deposits to ensure fixed return with less risk throughout your life.
5. Emergency Button:
Life is so uncertain and your income is inconsistent. Put a percentage of your income into emergency fund to meet uncertainties. It is wise to plan for your investments once your emergency savings target is met.
