Make a budget and find different ways to save your money

Financial management means to plan for the future such that a personal entity has a positive cash flow. If u want to cover all risk factors of life then it is essential to plan for retirement, because a thing u buy for Rs.100 today can cost you Rs.1000 tomorrow. So if you save Rs.100 today and invest it properly it can grow to Rs.1000 tomorrow.

3 Ways to grow your Capital
Everyone likes to increase their capital, but the question is how is it possible? There are only 3 ways for the same –
1. Save more.
2. Invest savings in high return avenues.
3. Keep a Long term view.
The early you start investing the more your capital will grow.

Savings the only way out-
The bottomline for the above 3 possibilities is Savings. If you don’t save you will be investing fewer amounts and hence your returns will be lesser. The earlier you start the better it is for your future. If one person starts savings at age 25 & the other at age 40, it’s logical that the person saving early will accumulate more!

Higher the Income Higher the expense-
These days people are getting higher pays. At a younger age they are earning high so they tend to spend more. Most youngsters who have decent salaries believe in living for the day and not saving for tomorrow. This may lead to financial crisis in future.
The above concept was clearly explained in the movie ‘Ta Ra Rum Pum’ where Saif Ali Khan used to believe in living for the day and kept on spending whatever he earned. Hence he did not save & had to pay for it later.

You can have anything you want,
You can be anything you want to be,
Do anything you set out to,
But what if your fate takes a U-turn & you are disabled to do anything…..!!!!
So every one of us have to be prepared for the worst & start saving for it. Unfortunately we forget these kinds of messages given through movies we see.
The people who believe in not saving for the day must watch ‘Ta Ra Rum Pum.’ This is my personal suggestion.

Lesson from other’s Experience-
There is lot to be learned from other people’s experience. If we don’t learn from their mistakes we may have to repent in future. I always advice to the people who come to me for their financial planning, to visit an ‘Old Age Home’.
People staying there are not living by their choice but because of their mistake during the earning period of not saving for the future. We won’t take such kind of decisions that we land up in an ‘Old Age Home’, RIGHT…..???

A Budget for Savings-
So start saving. Find out ways to save & save more. To achieve this, the first and foremost step is to make a budget. Analyze where the income is being spent. Aggregating all income & expenses, decide how much is to be spent on household expenses and make a BUDGET for it. It doesn’t imply that to save money one should stop watching movies only that one should think how much to spend on movies on a monthly basis. It’s rather good to stick to our budget then to compete with our neighbors.
‘Dikhaoo pe na jao par apne budget se ghar chalao’

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This entry was posted on Tuesday, February 17th, 2009 at 12:06 am and is filed under Mukesh Dedhia's published articles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.