This question could be on your mind if you have just switched jobs or just started working. Earning a salary can be exciting, and although your parents may still support you financially, your aim should be to become completely financially independent and prepared for emergencies.
A Savings Plan can start small and just requires commitment to look out for your future and achieve your dreams.
So, if you want to save more money this year, here are some tips to help you create a savings plan:
- Make a monthly budget
This may seem like a boring task, but it's one of the most essential ones. Spend time calculating your monthly expenses vis-à-vis your monthly income. This would include your electricity bill, loan repayments, money spent on fuel etc. What is left after deducting your monthly expenses is the amount you can save. This exercise will give you an overall view of your monthly financial situation. To make this tedious slightly less boring, you can always use the Expense Tracker HDFC Bank has. It categorises all your transactions so that you can don't have to!
- Set concrete goals
What are you saving for and how much should you save to achieve that goal? Buying a new bike, dream vacation, real estate investment or setting aside funds for emergency and retirement? Set a concrete financial goal, revisit the goal often and avoid getting off track. Without setting financial goals, you may end up spending mindlessly – and saving very little.
- Aim to be debt-free
When you have debts, saving becomes less of a priority. Out of your monthly income, put aside as much as you can to clear your debts. Only when you are debt-free can you seriously think of investment options. Paying Credit Card bills in monthly instalments involves a high rate of interest and you eventually end up paying much more than the original amount. This negatively affects your credit score. So, keep an eye on your Credit Card bills. Spend only what you can repay and do so in full at the end of each month. After all, now is the time when you can easily start building a good credit score.
- Maintain an emergency fund
It’s a great idea to put some money aside every month for emergencies. But you need to follow this practice consistently. If this nest-egg lies in your bank account, you may be tempted to use it to shop online. So, transfer it to a different bank account at the beginning of every month; one that you don’t frequently use for transactions. If you think you might forget, you can always use the auto-transfer feature most banks provide. This will ensure that your emergency fund continues to grow every month. The auto-transfer feature will also ensure you have one less thing to worry about.
- Investing any surplus funds
It’s a great idea to invest a fixed amount of money every month. How will you know how much you can afford to invest? The budget you initially made will help you make this decision. After you’ve subtracted the monthly expenditures from your income, you will be left with a certain amount. Invest this either in multiple financial instruments, or start one. A SIP (Systematic Investment Plan) might be ideal. Now now, don't get overwhelmed by all these terms. If you’re clueless about investment options, don't shy away from consulting an expert. The sooner you start investing, the higher will be your returns.
- Refine your spending habits
What many fail to understand is that the money spent daily on small things adds up to a huge amount over time. So if you want to start saving, you should concentrate on refining your spending habits. While it may be tempting to go out with your friends every Friday, let your financial goals remind you why you need to go easy with such outings. Of course, having a savings plan doesn’t mean you should stop socialising or enjoying life; it only means you smartly cut down on unnecessary expenditure while saving for your future financial goals. So, this World Savings Day, don't just save, #SaveToSpend! There are apps that can help you monitor your expenses. like HDFC Bank MobileBanking
Put a savings plan into action and you will be on your way to a better future!
Read here to know more about how to convert from splurging to saving.
Looking to start with your savings plan? Open an HDFC Bank Savings Account now! With HDFC Bank InstaAccount open a Savings Account instantly in a few simple steps. It comes pre-enabled with HDFC Bank NetBanking & MobileBanking and you can enjoy Cardless Cash withdrawals. Click here to get started!
*The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.
