Many dreams of owning a fancy car or traveling across the globe, or even owning a house of their own. Be it a childhood desire or a recent one, people have a number of goals that they would need to save towards. Though money is not the answer to all our problems, it sure does make life easy. A six-digit balance in our saving account can boost our confidence and bring in financial stability. If you are someone who is planning on building a savings portfolio and wants to know more about simple money habits that will help you save better, you should read on.
Tracking your income and expenses is very important if you want to save money. Without a budget, you will not be able to completely understand your financial position. So, make a note of your regular expenses like your house rent, groceries, and utility bills. Always foresee any unexpected expenses that you may incur the following month and make provisions for it. For example, if you are planning a trip, you can save for few months and take the trip when you are fully funded.
If you want to have sufficient savings, consider opening an RD account. A recurring deposit account is specially designed for people with regular income. A certain amount is debited from your bank account every month and will be deposited in your RD account for a specific period of time. On the maturity date, the bank will credit the amount you deposited with interest. As the RD amount is deducted from your account like any other loan EMI, you cannot use that money. Apart from making you financially disciplined, an RD account will act as an emergency fund during a financial crisis.
Of course, having a credit card is good and will help you improve your credit score if you use it wisely and are a prompt payer. However, do not overuse your credit card and fall into the debt trap. Having a huge credit card bill will eat your savings away.
In this era, it is almost impossible to stay without availing a loan. Having said that, avoid having multiple active loans at the same time. If you already have several loans, consider consolidating it and focus on paying it off as early as possible. Calculate your debt-to-income ratio and reduce debt as much as possible.
You do not have to be debt-free to start investing. You can take baby steps and invest in a Systematic Investment Plan. As the interest on SIPs is calculated as compound interest, you would have a significant amount of profit when the SIP matures. If you are unable to invest a huge amount every month, start small and invest a nominal amount.
Tax filing can be time consuming and boring. However, filing your taxes can help you save. You do not have to pay hefty taxes if you take simple steps like opening a 5-year fixed deposit or invest in a tax saving Equity-linked Savings Scheme.
Gone are the days when people took a diary and wrote down every expense. Thanks to technology, financial planning has now become very easy. There are many financial apps online that can help you stay financially disciplined. Did you know the BankBazaar App has amazing features that can help you restore your financial health? This app not only gives you financial information but also allows you to manage multiple bank accounts like checking your bank balances for various accounts that you hold and keep track of all your expenses. You can also track your credit card bills and your EMIs using this feature of the app. Apart from this, you can always stay updated with the finance news the app provides.