When we start earning, it’s a great feeling.
At the start, we try saving as much money as possible.
Then we shift to the next job with a hike in salary.
But now, you’re not able to save more money than you used to.
Does this happen with you?
We know that most individuals are surprised that they could once save 10,000 rupees when the salary was 30,000. But post 2 years when they are earning 40,000 rupees, they cannot save more than 10,000 rupees.
Why does this happen? To understand this, we have created a list of Top 3 reasons so you know where you’re planning is wrong.
- Living the rich life:
Admit it, sometimes we do feel like buying that latest iPhone, bike, costly shoes, and clothes, etc. But with a limited income, fulfilling all such desires is almost impossible. In order to fulfill these wishes, you end up taking the help of a credit card/personal loan.
Where does your savings plan go wrong – Because you have a limited income, you must understand your spending potential. Taking the help of a credit card and loan can only give you temporary happiness but post that you will have to pay your credit card bill/personal loan EMI. That will reduce your savings.
2. Not maintaining a Budget:
When the salary credits in your account, everyone feels happy. You go for parties, shopping, and enjoy with the money in your account. You also end up paying telephone bills, credit card bills/personal loan EMIs. This circle continues from month to month.
Where does your savings plan go wrong – Because you have a limited income and bills to pay, it is only wise for you to create a budget. This will help you understand what amount is needed for your bills, credit card/EMI, and travel/food expenses. Accordingly, this budget will help you improve your wealth.
3. Not investing at an early age:
We always think that we don’t have time for investments. Parking money in a Public Provident Fund (PPF) for 7 years (50,000 per year), Mutual funds and Shares for 3-5 years (50,000), etc looks difficult but if you start early at the age of 24-25, you will be able to end up with a very huge corpus of more than 10-15 lakhs when you turn 30.
Where does your savings plan go wrong – Because investing is not something that we know about, we don’t go ahead with it? But if you read online about the benefits of starting early and the power of compounding, you’ll be able to retire before 50 and enjoy life with the wealth that you saved.
Overall, it is wise to set a % for savings that you must follow with discipline. This will help you save a lot of wealth in 5-10 years. In case you are stuck in emergencies and don’t have enough funds, you can use these savings. In case even the savings amount is not enough, then you can apply for the best personal loans in India via Ruloans.