Savings: Base of Investment

Spend less than you earn” – An Old saying

I bet we heard it number of times, rather most of the times. Isn’t it? The fundamental and basic principal of personal investment is savings! However, the situation sometimes gets exactly opposite. The “Borrowings (or Credit)” makes hard to follow this simple principal of investment. Getting loans and use of credit cards are easy these days, but it certainly goes tough by reducing your savings.

Here are some tips that will help you save more:


According to Elizabeth Warren’s Balanced Money Formula (from her book All Your Worth), 20% of your income should go to savings, 50% to your needs and remaining 30% to your wants. Your needs includes bills, utilities, grocery and wants means all others things like shopping, entertainment, eating-outs etc. So, first thing – make a list of your monthly recurring expenses with categories/types and the amount you are spending on each category. Try to find out your actual needs and also Identify the spots where you can reduce you’re spending and cut-out on unwanted items.


Budget will help not only to control your expenses but also help make provisions for your future. Nowadays, online banking experience provides budgeting tools free of cost so make use of it at its most.


Keep track of your daily expenses. Let it be buying a chocolate, movie tickets, Tea, Coffee, jot it down. I know its pain. Go back to your records after a month and try to bring down the unnecessary expenses. If you are paying Rs.10 for a chocolate of Rs.9.50, that additional 50 paisa is the “extra” you paid. Remember every penny counts! Try to work out that little difference for you.

Set your financial goals. Be honest and realistic. Your financial goals should be measurable, realistic and achievable and make a time frame to achieve it. Retirement, child education may take longer duration but buying a house can be short term. You need to switch gears based on your goals, short term or long term. Setting goals will keep you on track and reminds you about savings.

Pay-off Debts:

Pay off your debts ASAP. Your income is largely axed by the “monster of debt interest”. The lesser the debt, more money can go towards savings.

Limit Credit Cards:

Limit the use of credit cards. It might help you to enjoy today but it will increase your tomorrow’s burden. Getting a credit card is not a big deal but watch out for the statement that will knock you down after 30 days. Try to make purchases on cash or debit card. Using credit cards for shopping, eating outs or on expensive items should be your last preference.

Follow these tips and am sure it will help you save some money. Happy Investing!

See you later.



  1. hi dear! was reading ur is great.very good info and very well put , use of simple language which is easy to understand ..5 * u and ur husband for good job .good luck .


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