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Finance: Saving up for the rainy days

31st March 2021 Print

Have you led a carefree life? Now, are you getting apprehensive about what future holds for you when it comes to finances. The mistake most people do is that they do not plan their lives. They spend their youth in leisure.

Can you relate to all this? Do you feel that you have been more focused on dining out frequently without a reason? Have you been too caught up in watching your favorite films and exploring Mr. Spin Free Spins.

It is time for a wake-up call. Little changes can transform your life for the better provided you start right away.

The smart ways to plan your savings

Plan your savings before you plan your budget

What most of us do is that we define our budget first. Well, this is not the smart approach. What you need to do is define your saving target first. When you have a good saving rate, then it becomes easy to build up your wealth.

If you plan to work for about 40 to 45 years, then a saving rate of about 15% will do you good. However, if you do not plan to work for such an extensive tenure, then try to boost your saving rate.

Get rid of debt

When you want to save up, then it is essential to get rid of your debt first. If you do not pay off your debt, then interest will continue to pile up. What you must keep in mind is that debt is lost money.

If you have a lot of debt, then you can start with the Snowball Method to get rid of the debt. What you need to do is start off by paying your lowest debt first. Once you get rid of the smallest debt, then you can add in the same amount to your next debt amount. The benefit is that you will get rid of your debt in no time.

Reducing your housing payments

When we talk about major expenses that are a burden on your pocket, then housing payment tops the list. The good news is that now there is a solution to this problem. The best approach will be to buy a small multi-unit property. You can stay in one of the units and rent the other unit. The rent can get added to your savings.

When you want to save up money, then you should avoid dining out often. What you must keep in mind is that restaurants have a massive profit margin. When you cook at home, then you can use the same amount to add on to your savings.

Initially, it sounds difficult but it is not impossible by any means. Start saving right away so that you do not have to worry about your future. It will be the smart approach on your part. Plus, you will not have any regrets.

Sit down and consult your financial advisor also to seek advice about financial savings.