Have you prepared your personal budget for 2024 and ready to face the challenges confidently?

 Make Your New Year's Resolution To Develop Your Savings Habit! 

Government budget refers to the forecasting of revenue & and expenditure of a country for a specific period in advance. It further elaborates on the ways and means of bridging the gap between expenses and revenue. Likewise, we too can forecast our expenses and revenue for 2024 in advance and face the challenges confidently.

 What are the main elements of a budget?

·        Income/Revenue.

·        Planned and unplanned expenses.

·        Borrowings.

·        Savings/investments.

 ‘A Rupee saved is a Rupee earned’ is an old saying neglected by many of us. Saving money is a good habit to have. It's also a good habit to pass on to your children. Once you have understood, you can change your spending habits by building new savings habits and becoming a money-saving addict.

The money in your hands today will not have the same value in the future. A rise in the prices of goods will reduce the buying power due to low disposable income. Whereas you can buy less in the future with the money you will have compared to things you can buy today with the same amount of money. Therefore, it is prudent to understand the importance of saving and start investing to grow your money to build wealth over time. It’s all about your determination and discipline. Here’s a list of some good savings habits:

“Cost of living is never expensive. It’s the cost of lifestyle that is expensive”

It is tough for salaried employees to increase their income or expand other revenue sources. Reducing unnecessary expenses is the easiest way to get the maximum out of the salary. Managing your spending might be the most prudent way to go. For example, bringing lunch from home to work or buying your daily meals at a less expensive restaurant will help you to reduce your daily expenditure. Warren Buffet is one of the world's richest and still lives in the same house he bought in 1958. He recognizes that the value of money grows when saving and investing.

Are you a person who used to purchase costly items at first sight? Stop and think about priorities in your life. If you have a credit card, use it only if you can settle the outstanding within the interest-free period. Next time, before you buy, ask yourself, “Why am I buying this? What are my priorities?”.

Get your salary directly to an interest-earning account. Withdraw only the amount you need and leave the balance in the account. If you have money left in the account at the end of the month, invest it and let it grow. You don’t have to spend every cent you have earned. Use part of it to reinvest. When you see the revenue of your investments rising and the income earned for the money you have managed to save, you'll become more determined to stick with it and save more.

 ·        Savings/investments.

Always look for ways to save and invest in financial instruments that can grow your wealth.  You can diversify your portfolio by investing in different financial instruments and hedging against market risk. It is important to assess your risk tolerance level, expected return, ability to take losses, and current and future market conditions before making the investment decision. Knowing the right strategy will help you to grow your wealth over time. Hence be familiar with the options you have for invest and take a calculated risk in investing. Make sure that you have regular access to financial instruments in which you have invested to minimize the market risk.

 ·        Borrowings.

Don’t get caught in the trap of obtaining loans for consumption purposes when you have other priorities in your life. When borrowing cost is low, it is prudent to borrow to reinvest rather than for consumption or to upgrade the living standards. This will reduce your disposable income. Hence list down the priorities and borrow only you can grow your wealth

 ·        Get the support of every member of your family to save

One of the best ways to get the support of every member of your family to save more is to make saving a habit of everyone. Talk to your kids and teach them the importance of saving money and spending money wisely. This will help to make saving money a lifestyle habit of your kids.

Place a till or a box in a convenient place at your home. Then each day, empty your pockets and dump your spare change into the till. You can ask other family members to follow the same practice.  Later you can deposit the collected amount to your savings account or use it to reward the family members for their contribution to saving.

It takes time, but once you get it right, the outcome is eye-opening. Compounding returns have helped to make many millionaires, although it does take time to compound and grow the wealth. The good news is that the earlier you start, the more time you have to grow your wealth. Start from the year 2024 and have a plan to develop your saving habits! Start saving and investing today for the future!