Everyone should plan
their expenses by having a budget. A budget is a simple financial
plan
that helps individual or family spending. Budgeting allows you to
track your monthly expenditures so that you can plan key savings strategies
for important short and long term goals. You will know how much you
earn and how much you spend and the balance available you can save.
There is no limit that you should save this much per month. You yourself
set some target to save per month and follow it consistently.
Savings might be in any form, like depositing in Bank, investing in
shares, or FD, etc., Savings such as putting a set amount of money
into a Bank each month; saving the income of one family member while
living off another member's income; or putting any "bonus" or non-regular
income into a savings account instead of spending it are really worth
savings. For many people, it's difficult to exercise self-control.
The most frequently cited savings goals are retirement, emergencies,
children's education , saving for one's own education, and saving
for a house .
In each and every family
there should be some sort of savings. So that you can run without any
problems in the case of any emergency. The savings will be useful in
the case of emergencies like health problems, job loss, company lay
off, etc.
For secured savings invest in shares, mutual
funds, bonds etc., It is better to take insurances like life insurance,
accident insurance and health insurance.
Be disciplined about your extra saving. Decide on a percentage or monthly
amount, then stick to it. The easiest way to maintain your saving strategy
is to opt for a stop order, which transfers money directly from your
bank account and into your chosen savings vehicle.
If you’ve been investing and saving extra for several years but
your strategy hasn’t worked, take a close look at where you’ve
invested. If there are any funds which have performed poorly from the
start, consider switching your money into another fund.
We have to keep in track
with the trend so that it will be very useful in helping you weed out
the genuine duds in your portfolio. Take a close look at how it’s
done over several time periods, say three and five years and compare
it to other investments in its category before going for other.
Spread your income in various forms like shares, property, bonds and
perform in different ways, depending on market conditions and economic
trends. It’s impossible for even the so called experts to say
in advance with absolute certainty which ones will do well. That’s
why it’s essential to work on a spread of investments. This is
also called diversifying your portfolio. This is one of the easiest
ways to reduce your risk of losing all your hard-earned savings at a
time.
Avoid gambling with savings. Avoid taking bets on company shares. It
sometimes works and many times fail.
The minimum requirements for a financially "healthy" family are
- One should have savings in cash (for
atleast 6 months of expenses)
- Savings in real estate (for secure
income, capital growth)
- Savings in shares/ mutual funds /
bonds (for capital growth at faster rate)
- Insurance cover for life, acccident
and health
- Insurance of property such as home,
real estate, other assets like automobiles etc.
- Loans towards creation of assets
are good such as housing loan, study loan, etc.,
- Loans that are taken for travel or
to buy household articles like TV, Fridge, etc., are said to be
bad loans.
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