Save Money


Many of you will think WHY SAVE MONEY.

My observation is that many do, but the trend is declining with passing generation; Gen X to Gen Y (millennials) and to younger Gen Z. I have observed three types of people: Who save, who think they don't have enough to save & who think they don't need to save.

This is for the latter two.

We are taught a lot of things during different stages of our lives but one of the most important thing which should be taught is never taught by anyone; i.e. to save money.

We humans have a tendency to crave for more. Our cravings don't have any limit. Our lifestyle expands with our income & sometimes even without an increase in income and once you have a certain lifestyle there is no coming back regardless of your financial situation .

"तेते पाँव पसारिये जेती लंबी सौर"

The more efficient you are with your money; more relaxed, calm & happy your life will be. Savings can provide peace of mind, open up options that improve your quality of life, and also help you earn money without doing anything at all (yes, money can do that). You should understand the difference between what you have and what you want. If you can't control your wants then you should increase your income but that's not always in your control & not everyone can achieve them, isn't it? So, it’s always easier to do things what's in your control.

Generally, people save money when they need to buy something or spend on something or for some specific goal. That's all good but you can also save if you have nothing planned because life is uncertain and we don't know what's in store for us tomorrow. Remember, when you are living on paycheck to paycheck, then there is no difference between you and a daily wage worker, who works pretty hard just to earn enough for his survival.

We all know the stuff that money can buy us but we don't realize the intangible benefits of money because that's unmeasurable so it goes unnoticed. Savings gives us security, financial independence, peace of mind, flexibility and control over our time. These things are incalculable.

That's why more and more people should save money.


Once you know WHY SAVE MONEY, you will ask HOW?

Learning how to save money is an important lesson of life which helps us throughout our lives. We all agree that money is one of the most important things in life. We need money to survive, to meet our basic needs, to provide for ourselves and our families.

"You must gain control of your money or the lack of it will forever control you" ~ Dave Ramsey

Creating wealth has little to do with your salary/income or the returns that you get on your investments, and a lot to do with your savings rate. It doesn't mean that you have to cut your basic needs or suppress all your desires to accumulate wealth.

"The value of wealth is relative to what you need, not what you want"

Here are some steps you could take to help get started.

The 30-day savings rule is simple: the next time you find yourself considering an impulse buy, stop yourself and think about it for 30 days. If you still want to make that purchase after those 30 days, go for it.

Sticking to a Budget: You don’t really know where your money is going unless you track it. That’s why for a month or two, you may want to take note of all your daily and monthly expenses. Believe me, noting down your expenses helps a lot in saving. The difference between your monthly income and your expenses is what you have left over to save. If there’s not enough (you can follow 50-30-20 rule - we will talk about it in this article, read on) left over, you can work on finding ways to cut spending or increase your income.

Putting Savings on Autopilot: If you’re manually putting cash away every month, it can be easy to fall behind. As, you may forget to move money into savings regularly amid your busy schedule or you keep procrastinating. And, unless you protect the money in advance by transferring it to a different account, you may accidentally spend it. If you’re putting away the amount you identified you need for your goal, you may get there without even thinking about it.

One must be able to identify the difference between needs, wants & luxury. Everyone needs the basics, once it's covered you crave to fulfill your wants and then you go for luxuries. Spending beyond your needs (and few wants), is mostly a way to spend money to show people that you have money. Remember the year 2020, we all were locked up in our homes. What we all needed was basics, and we are still alive without all those wants & luxuries.

"Past a certain level of income, what you need is, to satisfy your ego"

You can save more when you care less about what others think about you. The unhappiest people in this world are those who care the most about what other people think.

Savings has more to do with your control rather than how high your income is.

How much?

Once you know WHY & HOW, you will ask HOW MUCH?

How much, is one of the most difficult questions to answer. It’s very subjective.

However, there is one rule that you can follow, the 50-30-20 Rule. Divide your income into 3 parts,

50% - Needs - Groceries, rent, kids education, etc

30% - Wants - Entertainment, vacations, etc

20% - Savings - Banks fixed deposits, Savings schemes, Mutual funds, EMIs, etc

At least try to save 10% of your income. You can definitely save a lot more.

There is another rule that everyone must apply, the 3X Emergency Rule. Always keep at least 3 times your monthly income in Emergency funds for emergencies such as loss of employment, medical emergency, etc. You can have around 6 X Monthly Income to be on a safer side. Just think for a minute, whom you are earning for? Yourself & your family, right. If you don't think about taking care of yourself by saving money, then who else will?

"Still think you can't ?"

Remember, when you were kids you did things that you never wanted to do or even now when you are a working adult, you do things that you don’t want to; maybe you do it to make someone happy or something like that. So you can definitely save money for yourself, to make yourself happy or save money for a rainy day.