Established on 31 October 1924 by the Founding fathers of WSBI, the World Savings Day also known as ‘World Thrift Day has been marked ever since. World Savings Day, highlights the significance of saving for the future. Saving is essential for financial emergencies and ensuring a steady income in retirement.
If you are among the millions of people who are unable to save money for a rainy day, here are the behaviors preventing you from saving and how to break them.
Spending Everything You Have: Over the past few decades, disposable income has increased, which has also meant that the ability to save has grown. However, because there are so many options to choose from and saving is so easy, saving is getting harder and harder. “Our lifestyle and the cost of things have increased manifold, so to meet these and future requirements, providing for an amount that includes future inflation is paramount,” says the author.
Giving up something now for a better tomorrow may sound like a good idea, but Shweta Jain, the founder of the financial planning company Investography, believes that it’s crucial to set priorities and make sure your life is lived for you rather than for other people.
“To avoid feeling bad about your purchases, create and stick to a spending budget. Create an automated savings account, such as a SIP, for the remainder of your income so that you can save extra,” advises Jain.
Temptation To Purchase The Newest Gadgets: The desire to purchase the newest technology might develop into a habit that hinders your ability to make financial progress. These days, you can fit any expense into your cash flow by having the option to purchase any product with a credit card loan or other load where the payment is only a small portion of the total cost over several months. This allows you to feel immediately satisfied when you buy a product, which can lead to materialistic fulfilment. Rather than putting the money aside to purchase something more significant later on without taking out a loan,” says Amit Kukreja, the founder of the financial planning company amitkukreja.com and a Securities and Exchange Board of India (Sebi) certified investor advisor (RIA).
“Even if you have to make a recurrent deposit, start investing money each month and put it ahead of your other bills to break this pattern. The money’s movement prevents it from being available for any EMI or unforeseen expense payments,” the speaker claims.
In addition, a lot of people are blindly improving their lifestyles in an attempt to impress someone they may not even like. The director of financial planning company Ark Primary Advisors, Hemant Beniwal, is a qualified financial planner. “It’s become a trend for young adults to buy cars before they even start their careers, and our homes are filled with electronic items that hardly get used throughout the year,” he adds.
Not Comparing Your Expenses to Your Income: This can be a poor habit since it makes you less conscious of how money is coming into and going out of your bank account, which makes it difficult to save money. “Create a budget for your monthly spending to break this behavior. Keep track of your spending in relation to your income and make sure that each category of expenses has a limit. One would realize how much they can invest and preserve for a financially secure future once the restrictions are established, according to Kukreja.
Don’t Ignore Your Bills: Steer clear of handling your obligations in a reactive way, such as paying a bill only after being contacted by a collection agency. This strategy guarantees a never-ending loop of financial emergencies, which will lower your credit score. Your credit score is largely influenced by your payment history; timely utility, auto insurance, and credit card payments account for more than one-third of your credit score. In the event that difficulties arise, proactively work with your creditor to arrange a payment schedule before things get out of hand and go to collections. Making on-time payments a priority is essential to preserving your financial stability and good credit standing.
To get over this, establish an emergency fund to handle unforeseen costs and keep a close eye on your credit score. Become more financially literate to make wise choices and reduce wasteful spending to reallocate money to commitments. By doing these actions, you may manage your money wisely, promote stability, and enhance your credit score.
Put an end to treating your credit card like free money. Credit is a tool for finances, not a source of extra cash. Aim for budget-compliant spending limitations and refrain from making rash purchases. Make on-time payments your first priority to avoid accruing interest. Examine your credit card statements on a regular basis to keep tabs on your spending. Adopt a mentality that prioritizes cash for regular transactions, encouraging budgetary restraint. You may create sound financial practices, stay out of debt traps, and promote long-term financial well-being by using credit cards as a tool for convenience rather than as a way to get free money.