Tips for savings

[andrewan]

Your salary is more than enough for all your bills, children's school fees, groceries and the works. But what if, God forbid, you were to lose your job? Then what? Would you still be able to meet your expenses for the month?

Well, that's when the contingency/ emergency fund creeps in. It is important to have one at any stage of your life.

What is a contingency fund?

A contingency fund is over and above the money you put aside for your child's education, the house you plan to buy 10 years down the line, your daughter's wedding, a family vacation to the Maldives etc. Those funds have a name to it.

Contingency funds are for miscellaneous expenses that come up out of the blue.

But nevertheless you need to be prepared for them. For instance, your aged dad's medical bill, sudden house repairs and maintenance, loss of job or sudden long distance travel are not things you plan for.

You should never use your contingency fund for luxuries like a plasma TV, a swanky car or even a vacation.

Where to get the money?

An important question that might come to mind when saving for a rainy day is 'Where do I get the money from?' Well, you don't need to punish yourself to save for this fund. As and when you are able to put aside money, do it.

A credit card is extremely useful in emergency situations. You can make large payments with it while you might not be able to withdraw over Rs.1 lakh from your bank account without prior notice.

From salary

Once you get your salary in hand, you need to save a portion of it immediately. Yes, even before you pay the household bills, school fees etc. unless, of course, you are just about making enough money to pay up all that.

On an average you should save at least one-third of your salary. The amount you save can be used to meet various pre-decided financial goals. But you must save a part of it to your contingency fund.

Another thing you can save is increments. As your salary increases over time, you can even save up to 50% of your salary. After all, your expenses are not going to increase that much. So your contingency fund can go up accordingly.

The amount saved for a contingency fund varies from one person to the next. It depends on factors like in-hand salary, number of financial goals, monthly expenses etc.

However, a contingency fund should be at least Rs.50,000 if it is going to be sufficient to meet some kind of emergency expenditure.

From bonus

If you happen to get a quarterly/ half-yearly/ yearly bonus from your company, don't blow it up. It is the ideal way to start your contingency fund, especially if your salary is not enough to save too much.

Even if you bonus comes at a festival time and you really want to buy that exquisite saree, act as though you haven't even got that bonus. It may be difficult, but it is worth it when you really need the money the most.

[hamishmarshal]

The proper saving in life can make the future better so it is a need for every one to do some saving always if possible. For a proper saving always understand the difference between the wants and your needs and in the sense do the expanse. Raise your deductible, Always try to plan in advance, stay aways of trendy fashions, always expanse with wise mind and keep necessary inputs and output.

[rocksparow]

1. Slash the incidentals.
2. Pay yourself first.
3.Decide where to put that ‘payment.’
4. Pay ahead on your mortgage.
5. Shed credit-card debt