Many of the millennials and Gen Z have not developed the habit of saving. For them saving is a very daunting task. Why? This is because people are emotional human beings with unlimited wants.
In this era of digitalization where companies can show you targeted ads on social media and television, savings have become more difficult.
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So, how do you make effective savings? Jar, a Made in India investment app that allows people to invest in digital with just 1 rupee has released some interesting saving tips. You can save your money with the Jar app easily with just a click.
According to the Jar team, we must start saving money from today itself. Many people don't save because they feel that they don't earn enough money. Although this is not at all true.
Even saving Rs 10 every day is a great start. Once you start earning more you can increase the amount from Rs 10 to Rs 50. Remember time is money and the earlier you start saving the better it is.
Develop the concept of 'paying yourself first'. This means that whenever you get your salary or get paid you set a predetermined amount aside and then start spending. A good rule of thumb is to keep aside 15% of your income in savings.
Analyse where you are spending your money. Create a budget and divide your expenses into different categories like fixed or variable, needs or wants, inevitable or avoidable.
One of the most neglected things that can help you save large chunks of your money is to cook your own food.
Ordering food online not only makes a hole in your pocket but it can also affect your health adversely. Cooking food at home is both healthy and cost-effective. Don't purchase a two-wheeler or four-wheeler unless you need it.
Make a grocery list and only buy essential things. Cancel all of your auto-renew entertainment subscriptions like Netflix, Amazon Prime and Spotify if you see not using them on a regular basis.
Only use a credit card if it is very necessary and pay your most costly debt first. Most importantly, to increase your savings you should increase your income sources.
Instead of relying on just one income source, learn new skills and create 3-4 income sources. In this way, even if you are not able to make money from 1 income source, the other 2 will help you live a comfortable life.
The second step in creating wealth after savings is to start investing.
Remember, your money won't grow in your bank account. As the inflation rate is growing day by day the value of your money will keep on decreasing and the products will get more expensive.
Build your portfolio and spread your investment between different asset classes such as equities, debt, and cash. You can start investing in stocks, mutual funds, bonds, options, derivatives and digital gold. Don't invest all your money in one financial instrument. Instead, diversify your portfolio.
You should keep your investment horizon for at least 10 years. Your money won't grow instantly but it will take money. If you develop a habit of investing small amounts of money in different financial instruments the magic of compounding will do the trick.
If you are interested in investing your money in digital gold then the Jar app is a great option. The app links with your UPI account like GPAY and Paytm and invests spare change from your online transactions into digital gold. All of your money is used in buying 24-caratt gold.
The gold is stored in insured vaults by the seller under your name. The app is powered by SafeGold and the gold you buy is backed by the RBI-regulated trustee—IDBI.
The app uses the SMS to detect each spend of yours and rounds it up to the nearest 10. For example, if you buy a product for Rs 95 the app will round it up to Rs 100 and invest the difference (Rs 5) in digital gold.
You can pause, re-start or withdraw funds or gold anytime you want. You don't have to pay any locker fees. Most importantly, you can convert the digital gold into physical gold in the form of coins, or jewellery and get it delivered to your home.
You can also sell this gold anytime you want at live market rates, in either rupees or grams.
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