(1) Save every single instalment of income : Yes, I know what I am saying may sound a bit of a stretch, like a miser talking but it is valid and doable. Set a percentage. If you want to save aggresively than 50% save and 50% set aside for spendings. A little more practical and long term ratio should be somewhere around 20 % savings and 80% expenditure from your total income. You know your budget best. After taking into consideration deductions like EMIs, utility bills, travel and conveyance, rent, etc. set aside part of income again for smooth functioning of every day life such as shopping of food or clothes, hanging out,etc. And the rest should immediately be locked away as savings.
(2) Save first, spend later : A healthy habit is to mentally calculate the amount you will spend and save and then immdediately as the figures are decided, go ahead and save. Lock away the funds and do not procrastinate as some or the other expense will show up. Money is always lesser than needs so learn to cheat your indulgent side and go save. If you think money slips through your fingers the moment you earn it then especially do this.
(3) A Rupee saved is a Rupee Earned : Don't be disheartened by the fact that after so many deductions you will hardly be saving a very tiny amount. Drops make an ocean so don't worry if you are even able to save just 5 bucks or 500. Even if you manage to regularly save just Rs. 500 a month as savings, then after a year you will have Rs. 6000! Isn't that a better figure than zero. Keep a small box or glass jar or better still a piggy bank and save coins and small change as well. These seemingly 'insignificant' savings have rescued me in the past.
(4) Rainy day : We were taught the importance of savings in kindergarten (remember Aesop's fable - The ant and the grasshopper). Old age will come and it will not be kind. You can work hard now and save up for the future when your limbs or brain may not support you. Sorry to paint such a morbid pucture but we have no way of knowing whats in store for us say 20 years from now. So while it is best to hope for the best, prepare for the worst and savings help you do just that.(5) Peek into the future : If you haven't yet set financial goals then just ask yourself this question. Why save? And then picture your future - Do you want foreign vacations with family? What about your kids education and fees? What about medical emergencies? What if at some point you decide to start a business and need finance for that? What about yor assets like home and car? Do you wish to own and expand them? For yourself and your family? There is inflation and prices will keep going up in the future too. Have you provided immunity to yourself and your loved ones so that the price pinch doesn't hurt? You will know where you stand and how aggressive you need to be to start saving .
(6) Never stop : Do you stop brushing your teeth after a while? Do you stop eating and breathing? Alright, I may be just stating bodily functions but the point is expenses like electricity, food and clothes are life long and so should your habit of saving be. Never be satisfied if at all you have reached a certain goal. Diversify your portfolio. It's not about being greedy, it's plain common sense. If at all you hit a phase where say you are jobless or aren't making enough to make ends meet then it is understandable to take a break from savings. But as soon as the party starts, start saving again if you wish the party to continue for life, long after you have retired and have a dozen grand children to take care of.
(7) Don't just save, make your earnings earn for you : There are many investment options available today. First try and establish a safe portfolio with limited risks (these often have limited returns as well.) And once you reach this threshold, diversify and take small calculated risks to reap in more benefits. A professional financial consultant should be able to guide you more in this regard. Search around, seek the correct advice.
(8) Millionaire in the crib : Teach your children, the value and respect for money and the importance of saving. Install in them, since a young age the habit of saving. I am definitely not saying that you should not indulge them! That would be cruel and what would childhood memories be made of if not pampering them silly! However, side by side train them now so that they don't grow up to be impractical adults who find it impossible to save. Teach the difference between basic necessary spendings and extravagance. You can buy them a small cute piggy bank as a birthday gift and keep track of their hard earned savings and gently encourage them every now and then. It will be a valuable lesson and they will thank you for life.- S. Chaudhary
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