A dream house, a new car, children’s education, and marriage, an exotic holiday, retirement – you could have one or more financial goals. However, we all know that money doesn’t go on trees and chances of winning a big lottery are as good as finding a needle in the sea. So, you will have to work hard towards building a sizeable corpus on your own.
Here are some useful tips to save money to reach your financial goals.
- Determine Your Investment Portfolio
Your investment portfolio should be aligned with your risk appetite and financial needs. Make sure you diversify your portfolio by investing in a good mix of debt and equity instruments. So, you invest a part amount in fixed deposits and an insurance policy and another chunk in equity stocks. It is also recommended to invest in mutual funds. You can either invest lumpsum in mutual funds or small amounts every month or quarter through SIP investment.
- Save, Invest and Spend in That Order
The legendary investment guru and one of the richest men in the world, Warren Buffet says, “Don’t spend what’s left after spending, instead spend after you invest or save.” As soon as you receive your salary or income every month, set aside a portion of income or salary in your savings account and make all your investments. Then spend what is left. When you have a lesser amount to spend, you will automatically save more.
- Be Debt and Credit Wise
There is always the temptation to borrow money from banks/friends/family or swipe your credit to overdraft limits. But, do remember that loans and credit cards increase your debt burden. So, it is advisable to stay away from debt until and unless it is absolutely necessary. Check whether you can pool money from your existing savings or cutting down your expenses.
- Cut Down Avoidable Expenses
Fixed expenses such as utility bills, children’s school fees, groceries, etc. are unavoidable and will incur every month. But, there are some expenses which are completely in your control, and you can easily cut them down — for example, dining out, watching movies, cell phone usage, spontaneous shopping, etc.
- Take Professional Investment Advice
If you are an investment novice, especially when it comes to online stock market investment, it would be a good idea to seek services of brokers or financial experts. They understand your financial goals and offer investment advice accordingly.
The above-mentioned practical tips will help you to save money in a structured manner.