Deepavali all over South India is celebrated as the event, marking the defeat of the Demon Narakasura by Lord Krishna. It is symbolic that we also celebrate this Deepavali by defeating the SPENDING NARAKASURA in us.
Very few people have a control over their cashflows and how to manage the same. Since most people do not have a plan, they end up always spending on impulsive purchases and thereby having little or no savings at all.
Today let us look at 5 simple things that one can do to achieve financial savings and let us start on this happy occasion of Deepavali. Interestingly, it is also celebrated as Lakshmi Pooja to get some control on one’s spending.
KEEP AN ACCOUNT OF YOUR SPENDS: If you don’t know what you are spending on, it is unlikely you will ever save. Keeping tabs of your spends is the first conscious attempt at getting control over your finances. Spend time every day ideally over dinner to keep a small notepad of your expenses from that day of transactions in cash, Credit card, bank account etc. so that you are becoming aware of your spends.
DO A BUDGET: Once you have a handle on your spending, it is good to draw up a BUDGET. A budget is nothing but a statement of all your likely income and expenses in a given month, done in advance. Anything you cannot predict in advance is usually impulsive spends and not really necessary for one’s existence.
P.S.: Most important is to set aside at least 20% of one’s income into a separate savings account while planning a budget.
GET RID OF YOUR CREDIT CARDS: Try to wean yourself away from credit card spends and unnecessary usage of credit cards that are high on costs as well as promote reckless spending. Ideally, give up your credit card. This is the best long-term saving habit that you will ever do for yourself. If that’s not possible, then learn to use it only in case of extreme emergencies.
DEFINE A FINANCIAL GOAL: Define a goal that your monthly savings can be deployed to help you reach. The goal can be a simple corpus for an overseas trip to more serious Higher Education Fund for your children. As long as there is a goal that you can define for yourself, which, in your mind, is important to your family in the future, there will be enough motivation to continue to save.
REVIEW: Every six months, review the savings made and also the goals achieved. Do a quick review if you can increase the savings by about 5-10 %, due to better saving opportunities or higher incomes. Give yourself a pat on your back if you have done well, as we need a lot of self-motivation to continue the course.
REMEMBER, YOU WILL ACHIEVE ALL THAT YOU WANT TO. YOU JUST HAVE TO WANT IT BAD ENOUGH.
HAPPY DEEPAVALI, HAPPY SAVING.