Easy Savings Tricks For Millenials
“A penny saved is a penny earned,” said Benjamin Franklin over 200 years ago. If you were to rewrite this quote in the present-day scenario with the fitting investments, it would otherwise be written as
“A penny saved is two and half a penny earned with interest.”
Problem with Millenial’s Savings habits:
A study conducted by Deloitte in India revealed that millennials save only 11% of their total income every month. On average, millennials spend most of their money on their lifestyle and things that give short-term happiness. A lack of savings habits and not comprehending the importance of savings is the reason for such behavior.
Learn a lesson from The Pandemic:
Perhaps the biggest lesson the pandemic has taught is the importance of savings to face a rainy day. The need to attend to this has become more critical than ever before.
How do I increase my savings fast?
Sadly, there is no quick fix to save money. The easiest way to save money is through disciplined spending and dedicated investing. You need to learn to steal money from your income to save and invest in proper avenues. Here are some easy money saving tips for doing it.
Easy Savings Tricks for Millennials:
- Divide and Rule: Divide your earnings and give each aspect of your life a fixed budget. Be it entertainment, monthly essentials, lifestyle, etc. Allocate a fixed amount that you have to save every month. Budget allocation is one of the easiest ways to save money. At the start of the month, make a list of things you need to spend on and see that you never cross the budget you allocated.
- Reduce credit card usage: Always refrain from using credit cards to purchase anything unless it offers significant benefits in the form of discounts. Usage of credit cards is the primary reason for falling into a debt trap and ending up spending most of the income which otherwise would have become your savings.
Reducing credit card usage ensures that you never spend more than the allocated budget, and you’ll start your path towards saving money.
- 30-day rule: It is the most effective way to save money by curbing impulsive spending. Halt any big purchase you intend to make for the next 30 days and see how your need for it changes by the end of the last day. You’ll be surprised to know that many of these things that you otherwise thought were utmost necessary would instead start looking like an unnecessary expenditure. Religiously practicing the 30-day rule makes you wiser in your spending and savings habits.
- Tax savings: Approach tax planning strategically to maximize your savings. You can do it by claiming all eligible deductions and also benefiting from investing in tax-saving instruments. There are several products in the market for this purpose. Investing in them gives you the double benefit of saving tax and building a savings corpus for yourself. With Tata AIA policy details mentioned on their website will provide you with all the necessary information to avail of such benefits.
- Start saving early for your retirement: To start thinking about retirement may feel a little off at the age of being a millennial but understand that building a corpus is not easy unless you start it early. If you were to accumulate a good amount in savings corpus, which is usually 1 to 2 crore rupees by the time you turn 50, you would need to start it at least from the age of 26.
Building corpus also gives you confidence and the necessary motivation to discipline your spending. Making it easier to save money by curbing any unnecessary expenditure.
- Invest in a long-term savings plan: A savings policy offers guaranteed returns on your investments and also covers you for life insurance. There are many long-term savings plans in India that offer various benefits. These long-term savings plans help build a corpus by giving standard returns and maturity benefits upon completing the policy term. Since these plans stand unaffected by market conditions, they are risk-free. A good corpus helps in fulfilling your dreams and long-term financial necessities.
To sum up
While short-term pleasures give an instant rush of being happy, true happiness always lies in carefully finding ways to save money from your life earnings to secure a financial future for yourself and your family. The pleasure of providing and attending to the needs of the family is far better than any short-lived happiness.