Adopting sound money habits is critical to building a solid financial foundation. And one of the most effective ways to improve your money management skills is to create a savings plan. The higher the savings, the closer you can be to your financial goals.
So, how to save money for the future? Here are 8 tips that can help you begin –
1. Start Tracking Your Expenses
If you're living paycheck to paycheck, you must first figure out where your money is going. Based on the information, you can start changing your spending and saving habits. In addition, there are now several mobile apps that you can use for expense tracking.
2. Set Your Priorities
Once you know your monthly expenses, it is easier to prioritize them. Prioritising ensures you have enough money for all the "must pay" expenses such as rent, loan EMIs, groceries, utility bills, etc. You should focus on expenses at the bottom of the priority list and look for ways to minimize or eliminate them.
3. Cut Down on Your Spending
The most effective way to start saving for future financial goals is to reduce expenses.
For instance, you can reduce the number of times you order outside food and try and restrict window shopping or impulsive buying. You can also switch to a cheaper loan and insurance provider to save more.
4. Set Goals for Savings
You should also set short-term and long-term goals in your savings plan. A short-term goal could be purchasing a new car in 2-3 years or something simpler such as saving 10% more in 2022 than the previous year. Long-term goals can be retirement savings or saving for your child's education or marriage.
5. Avoid Unnecessary Debt
Loan availability is now easier than ever. But that doesn't mean you should take one at every possible opportunity. While you might need a home, car, or education loan, consider other types of loans only when necessary. If you're already repaying loans, prioritise repayment based on their interest rates.
6. Start Investing
Once you start saving more, what should you do with your savings? Start investing. For instance, you can choose a low-risk Fixed Deposit investment to make your savings grow over time. Based on your objectives and risk appetite, you can also consider other options, such as Stocks, Mutual Funds, Real Estate, Gold, etc.
7. Regularly Track Your Credit Score
You should regularly check your credit score if you've previously taken any Loans. Try to repay your Loans on time as it impacts your credit score. A higher credit score will make you eligible for other Loans if the need arises.
8. Choose the Right Bank Account
If you're about to open a new Savings Account, you can choose to open a high interest rate Savings Account with AU Small Finance Bank. In the long run, the high interest rate can play a significant role in helping you grow your wealth.
Smaller steps like the ones listed above can help you build a strong and practical savings plan. The support of a reliable banking companion like AU Small Finance Bank will also be critical to the plan.
With high interest rate, AU 0101 App/NetBanking, Video Banking, monthly interest on Savings Account, and more, the bank can support your savings plan in several ways, helping you build a solid financial foundation for the future.