How Can I Increase How Much I Save?

By BankBazaar | June 29, 2017

How Can I Increase How Much I Save

Your finances are not something you should take lightly. While earning money gives you an immense sense of freedom, it is also essential that you save a portion of your income on a regular basis.

The accepted rule of thumb when it comes to savings is that you must put away at least 10% of your paycheque every month. If you can save more, then that’s fantastic, but 10% should be the bare minimum you should put away regularly if you’re serious about saving money.

Be careful though! Saving doesn’t mean dumping your money in a Savings Account at the beginning of the month and then using it because you overshot your budget at some point during the month. Remember, developing a savings habit can go a long way in helping you achieve your life goals and your dreams.

Additional Reading: Money Lying In A Savings Account?

There can be various reasons to save money. It could be anything from making a down payment on your Home Loan, buying a new car, saving up for retirement or simply because you want something to fall back on. The reasons are practically eendless

However, one thing is for sure. The amount of money you save and the wealth you create now, while you are still a young earner, will determine your financial comfort later in life.

Additional Reading: 5 Ways To Stay Committed To Your Savings Goal  

Set and achieve savings goals

Whether you’re going on holiday or cooking a meal at home, almost everything you do in life requires a plan, no matter how big or small. The same goes for your money. To begin with, you need a financial plan and set yourself financial goals.

If you have just started your career and are new to savings, it would be advisable to start small. Set yourself a beginner’s goal and see if you can increase the percentage of your savings.

Here’s where it gets interesting. If you find, after six months or a year, that you have attained your savings goal or kept at it regularly, you could reward yourself for achieving your financial milestones. This will definitely motivate you to save more in the future.

Planning your finances effectively coupled with disciplined savings over a period of time can help you attain your savings goals faster than you can imagine.

Set yourself a savings target that you want to achieve by the end of the year. Put away a sum of money regularly every month. At the end of the year, consider raising the bar and increase your savings by a marginal amount – a percentage that you feel comfortable with. You’ve obviously heard enough and more about overshooting your budget, but just imagine how you would feel if you overshot your savings goals. Like being on cloud nine, eh?

Additional Reading: How Your Brain Is Wired Towards Saving And Spending

Set yourself a monthly budget

As soon as you have a realistic savings goal in place, the next step you need to take is to create a monthly budget. Work towards reducing spending on various frivolous daily or monthly expenses. Hey, we aren’t saying you need to nix the essentials. But, you can certainly find ways to cut corners, right?

Create a budget that you can comfortably stick to and make sure you don’t deviate from it. IIt will certainly benefit you in the long run.

Additional Reading: Here Are Six Lazy Habits To Build Your Savings

Easy ways to save money

Looking for easy-peasy ways to save money every month? Review your spending habits and see where you can adjust your spending. Most of the time, it’s all the small expenses that tend to add up.

Here are a few easy ways to save

If you can make saving a certain sum of money every month a regular habit, you will find it much easier to prioritise your savings. Here are a few ways to save money through more convenient means:

  • Match your employer’s contribution to your retirement fund

You surely have the option to contribute the same percentage of your employer’s contribution to your Employee Provident Fund (EPF) account. Match your company’s contribution to your retirement fund and watch those unnecessary worry lines on your forehead vanish. More money for you and with less stress as well.

  • Set up auto-debit between bank accounts

If you find it tiresome to transfer a certain amount of money from your salary account to your savings account every month, think about establishing an auto-debit facility that will make the transfer instant and automatic on a predefined date every month.

  • Choose direct deposit to your savings account

We know how soon money seems to vanish from our salary accounts every month. This wouldn’t necessarily be a cause for concern if your savings were taken care of. Check with your employer or company’s Human Resources or Payroll department if they can process a direct deposit of a fixed sum of money every month to your savings account. Follow this rule of thumb: if the money is diverted away from your salary account, you can’t spend it.

Additional Reading: How To Get Started On Your Savings

Now, let us get back to telling you how you can save more money.

Have you heard of an emergency fund?

If you have managed to save a sizable amount of money, think of it as an emergency fund. Want to know why an emergency fund is beneficial? An emergency fund is simply your financial safety net, in case you are faced with a financial emergency. Read about how to create your own emergency fund.

Get a financial planner

Once you have your emergency fund in place, the next step you must consider taking is to invest your savings. Don’t allow your hard earned money to idle in a low-interest Savings Account. Make your money work for you and earn returns. Investing your money will allow your money to grow over a period of time helping you achieve wealth creation for a comfortable future.

It is advisable to engage the services of a financial planner. They will walk you through the process of investing and explain the various risks associated with each investment product.

Factors to consider when you begin investing

Investing can be a daunting, yet exciting prospect. We can tell you four factors to consider when you want to start investing. Remember, investing helps to build wealth for investors. There is no other way to multiply your money relatively securely and fast.

Read This: Worst Investing Mistakes To Avoid

Are you ready to start investing?

Before you actually take the plunge into investing, you must analyse your financial situation and find out if you are actually prepared to delve into investments.

Here’s a word of caution. It is not a good idea to dive into investments if you are caught in a debt trap. If you have Credit Card bills pending for example then it really doesn’t make sense to attempt to grow your money when high-interest debt is eating away at your finances. Get debt-free first.

How much can you invest?

Decide on an amount of money that you can begin investing with. Think about how much you can comfortably continue to invest on a regular basis. Deciding how much you can invest regularly will help you find ideal investments to suit your investment goals and objectives. Choosing an investment amount allows you to set achievable financial goals.

Check This: Investment Options For Everyone

Here’s a tip: Do not invest your emergency fund money, because that will simply defeat the purpose of having an emergency fund. An emergency fund should give you quick financial liquidity when you need it, especially at short notice. Invest in Mutual Funds for long-term wealth creation.

Understand the different types of investments and their risks

Every type of investment is different and each one has various risk levels associated with it. If you want to be successful at investing, it is important to understand the different types of investments and their risks.

You must attempt to understand the difference between Equity Mutual Funds and Debt Mutual Funds. All you need to understand is that, equity investments are linked to market performance and hence are volatile, whereas Debt Mutual Funds offer steady, stable returns that are not linked to the stock market.

When you are considering different investment opportunities and choices, you should also think about how comfortable you are with taking risks with your money. Read about the different life stages and how they impact your investments.

Your risk tolerance will change based on your age and financial responsibilities. For instance, when you are in your 20s, you may find that you can afford to take a higher degree of risk with your investments because of an absence of heavy financial commitments. This means you have more freedom to explore possibilities with your money.

As the years pass and you grow older (and wiser) you may need to become more guarded and conservative with your investment strategy.

Additional Reading: 7 Basic Investment Principles You Must Follow

Hopefully, you should now be wiser about building your savings and investing your money in wealth-building avenues.

All information including news articles and blogs published on this website are strictly for general information purpose only. BankBazaar does not provide any warranty about the authenticity and accuracy of such information. BankBazaar will not be held responsible for any loss and/or damage that arises or is incurred by use of such information. Rates and offers as may be applicable at the time of applying for a product may vary from that mentioned above. Please visit www.bankbazaar.com for the latest rates/offers.

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