Want to know how to give your personal financial plan that kick-start? Read on and get your plan in action right away.
There’s a big difference between planning your savings or investment strategy and actually putting it into action. If you seem to have problems kick-starting your savings habit into full gear, this article is surely worth a read!
Putting a fool-proof saving system in place for your personal finances can be a daunting task, but here are simple things you can do to achieve it.
Additional Reading: 6 Common Budgeting Blunders and How to Fix Them
Embrace automation
Fix a particular amount that you’d like to save every month. Once you do that, set up a standing instruction or automated transaction schedule that will send your money from your salary account to your savings account. This way, you’ll make sure that the right amount of money goes out each moment with minimal human intervention.
Additional Reading: How to Automate Savings and Investments
Set up online bill payments
Most net banking avenues are equipped with features to enable you to register billers such as your mobile service provider, electricity board, etc. You can link these billers to your bank account and have your monthly bills automatically paid on the scheduled date. This way, you’ll ensure that your bills are paid off at the right time.
Set up an emergency fund
You need to clearly demarcate a personal emergency fund that will prove to be highly useful during unforeseen circumstances – and yes, this should be something other than your primary savings account.
Always try and chalk out a small amount that can go into what you can call your contingency expenses. The amount doesn’t have to be as big as what you’re allocating towards your primary savings account, but it should ideally be enough to gather an amount that can cover basic emergency needs in the long-run.
By the way, this fund doesn’t always have to do with health-related emergencies. They can cover just about any irregular expenses that come up when you least expect them, such as car repairs, home repairs, and yes, medical expenses too.
Additional Reading: How to Deal With an Emergency Situation
Be good to your Credit Card
Your Credit Card has been there for you when you were short of cash, so it’s only good karma to keep your end of the deal. When your bill comes calling, don’t shy away from a payment – this usually occurs when you’ve not planned your expenses well. To avoid situations like these, you might want to ensure you clear your Credit Card bills as and when they’re issued to you.
Take vacations seriously
No, we don’t mean you should spend all your money on a vacation. By ‘seriously’, we mean you need to plan the finances for your holiday well in advance by setting up a vacation fund. Most often take vacations and holidays for granted when it comes to financial planning. The truth is if you do set aside some money for fun, travel, and entertainment, you’re ensuring that you won’t be biting into any primary savings when you suddenly get the urge to go on vacation.
Set up a vacation fund; the monthly amount can be as humble as Rs. 2,000. You can always gradually increase it when your income goes up… a few years later, you’ll be glad you even thought of saving for fun.
Additional Reading: A Vacation Spot for Every Budget
The three pillars of good budgeting
For any budget plan to successful translate from paper to real life, it needs to be:
Easy to follow – That’s why we recommend embracing the convenience of automation.
Well thought out – At the risk of repeating what we said about planning for vacations, thinking about all possible expenses you may incur, even those apart from your basic needs, will help make your savings strategy successful in the long run.
Non-burdening – No savings plan that eats into half your monthly income will ever work. When it comes to budgeting, you’ve got to be realistic. Work within your means and you’ll truly find a pragmatic plan to help you glide through your savings plan like a boss.
Ready to get your finances right?