The Buyt Desk
COVID-19 taught us the importance of having an emergency fund. Those who had planned their expenses to create emergency funds sailed comfortably through the tough time while others suffered.
The new year has just begun, and we all are ready with our resolutions. But amid all your resolutions, do not forget to create an emergency fund for the future. If you think creating a corpus with a small income is an uphill battle, this article might help you change your perception. However, to make it happen, you must stick to your vows in every condition.
Simple Tips to Save Big
If you think you are too late to save for emergencies, you are not! It is never too late to save! Though little savings started late, may not build a huge fund nevertheless enough many times.
Invest in Flexible RD or SIP
Recurring deposit and SIP are two investment products that give freedom to start saving with any amount. In both options, you can start with as low as Rs 100. Nevertheless, to create a decent fund, one should start with Rs 1000 minimum.
The easiest way to do this is to activate auto-debit in the salary account. Trat this investment amount not a part of your monthly earnings and plan your expenditure from the remaining amount. If your salary is Rs 30,000, and you plan to invest Rs 1000 monthly then manage your expenses within Rs 29,000. An RD of Rs 1000 for a year will give you Rs 12,000 plus the interest earned upon maturity. You can park this money in the fixed deposit later and earn interest on it again.
SIP in equity mutual funds comes with calculated risk, which makes it a safer investment product. You can choose SIP to park your money and let it grow. It gives a better return than RD.
Use Budgeting Method to Reevaluate Your Budget
Having a budget for everything might sound restrictive, but it also helps you get an in-depth look at your unwanted expenses. Use budgeting formulas to save a portion of your earnings every month.
Watch Your Progress
Watching things grow, even slowly, gives lots of positivity. If you have created short-term goals for yourself, check their progress every fifteen days or a month. It will boost your confidence and try to stick to that saving plan. Additionally, try to save more when you get extras like a bonus, increment, etc. If your budget is tight, restrict some expenses like eating out or ordering food and shopping.
Search for Extra Income
If your payout is less, increase it by doing some extra work. Invest some money to upskill yourself. Look around for some freelance work. All these will put some extra bucks in your pocket. Always push yourself to earn more.
If you have set a resolution to improve your financial condition this year, follow these tips to execute it. If you haven’t, resolve it because it will help you deal with future crises.
