Wealth creation is synonymous with gradually achieving your dreams and protecting you from future contingencies. If you begin with a very small amount at an early age, you can easily build up a treasure chest for your old age. Building your savings is a much easier task than most people imagine. You just need to know how and have a plan to achieve your goals.
Start by cultivating these six habits early on. For instance, opening your own Savings Account is an important pillar.
Importance of saving
Knowing why you need to save helps you stay motivated on the journey. Here are some of the reasons why you must save:
- Your savings help get through tough times such as during a job loss or emergency hospitalisation
- You can dream big and fund all your goals, which can include amazing vacations
- You can lead a comfortable life, today and during retirement
- You can secure the futures of loved ones
- You can enjoy good mental health due to a lack of financial worries
Great habits to help you save
Now that you know why you must save, let us see how we can meticulously do so to secure our future:
1. Have your own Savings Account
Today, many people manage their finances from a salary account. Alternatively, they may be a joint account holder with a spouse or another family member. The best policy is to have your own Savings Account, which gives you the autonomy to save money and build your assets.
You can earn quarterly returns via the Savings Account interest rate. You can also enjoy the benefits of reward points exclusive deals, and insurance coverage on your Debit Card. You can activate a Digital Savings Account within minutes through a paperless onboarding process.
2. Budget for the year
Enhance your financial management skills by creating an annual budget. Start by allocating funds for fixed needs such as rent, variable needs such as clothing, wants such as leisure activities, and savings.
Try to increase your saving percentage as you continue budgeting. The ideal approach is to budget annually so that you can also factor in costs such as insurance payments.
3. Track your expenses
If you find yourself asking every month "Where did my salary go?" then tracking your expenses is an important habit to build. This activity helps you keep track of real-time spending.
For instance, if your spending data indicates that you are shopping ad hoc and not saving, then you can correct this behaviour, early on. Use an app to track all expenses or write them down in a spreadsheet.
Also Read: 6 things to consider before opening a Savings Account
4. Build an emergency fund
It is always important to reserve some cash for emergencies. Say in the event of a job loss, you must have access to 6 to 12 months of monthly expenses to tide you through until you find a new one.
The benefit of an emergency fund is that you do not need to sell assets or take a loan to tide you through. You can stash your emergency cash in your Savings Account, or a liquid mutual fund.
5. Buy insurance
You must consider buying health insurance for yourself and your family members. This product ensures that the cost of hospitalisation and related expenses are covered. If you have dependents, such as children and a spouse, you can buy a life insurance policy which ensures your loved ones are looked after even when you are no longer present.
6. Start investing
Online Savings Account opening paves the way to build assets. While your Savings Account earns interest, it is a good practice to build additional investments. Consider investing in a mix of Fixed Deposits, Recurring Deposits, and Mutual Funds.
You can also build long-term savings through schemes such as the Public Provident Fund, and a National Pension Fund (NPF). Start investing, seamlessly, through internet banking or mobile banking from your Savings Account.
Today, the Axis Bank Savings Account opening process is highly streamlined. Choose from a wide range of products based on your financial needs. You can earn reward points, and score exclusive deals. The best part is that you can open your account in minutes through a video Know Your Customer (KYC) process.
Also Read: Differences and Advantages of Savings vs Current Account
In conclusion
When it comes to planning for your future, saving early on is the best way to go about your financial tasks. Start investing early on, even if it is only a small sum you can afford. Such small investments grow into big treasure chests by the time you are really in need of an emergency or for your dream vacation. Save smarter and save better to lead a peaceful life.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
