Budgeting is like creating a roadmap to your financial dreams. It's the compass that helps you navigate through the maze of monthly expenses and savings, ensuring you stay on track to reach your goals. By creating a budget, you gain the clarity and control needed to manage your finances. Learn how to budget and save with a Savings Account.
How does a Savings Account help in budgeting?
1. Saving Accounts keep your funds separate
You can set up a dedicated Savings Account for keeping the money you have saved for specific reasons. For example, if you are building an emergency fund, open a new Savings Account to maintain only that fund.
You can open an ASAP Digital Savings Account with Axis Bank from the comfort of your home. You can open this account digitally without any paperwork and branch visits. Features include exclusive rewards and welcome benefits on movie tickets, food delivery apps and shopping brands.
2. Savings Accounts assist in monitoring your finances
Once you create a budget, you need to monitor your expenses and savings to make sure that you are sticking to your plan. You can download the monthly statements of your Savings Account digitally within a few minutes and track your transactions and bank balance.
3. Savings Account allow you to invest conveniently
If you don't want your savings to lay idle, you can invest them into Fixed Deposits, Recurring Deposits, mutual funds and other investment options conveniently through your dedicated Savings Account. You can also have a look at bank interest rates on Savings Account. The higher the interest rate, the more you will earn on your funds.
How to create a budget using your Savings Account?
Step 1: Track your monthly income and expenses
Use your Savings Account statement to find out your exact monthly income and expenses. Bifurcate your spends into categories like rent, groceries, clothes, restaurant bills, etc., to understand what you are spending on. You can identify unnecessary expenses using this information.
Step 2: Set a savings target
Decide the amount you want to save, along with an expected timeline. For example, if you wish to save ₹1 lakh within a year, your savings target would be ₹8,199 a month, assuming 3% interest on your Savings Account. Having a separate Savings Account for your saved funds would help you track your progress.
Step 3: Divide your income into categories
Allocate your monthly income to savings, needs and wants. First, cover your essential expenses, then cover your savings target, and lastly, leave the rest for leisure. Transfer an amount equal to your monthly savings target to the dedicated Savings Account at the start of the month.
Also Read: Complete guide on how to open a Savings Account in 5 easy steps
Conclusion
Budgeting and saving money requires financial discipline, patience and consistency. Once you learn how to budget and save with a Savings Account, you need to follow the process consistently until you reach your target. Whether you're aiming to save for a dream vacation, a new home or simply to build a rainy-day fund, budgeting is the essential tool that transforms your financial aspirations into reality.
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
Mutual Fund investments are subject to market risk, read all scheme related documents carefully. Axis Bank Ltd is acting as an AMFI registered MF Distributor (ARN code: ARN-0019). Purchase of Mutual Funds by Axis Bank’s customer is purely voluntary and not linked to availment of any other facility from the Bank. T&C apply
