Can money make us happy? Well! Money may not be everything in life, but the lack of it can definitely make us unhappy. Little do we realize that we spend most of the waking hours of our lives in search of money. The modern trend is to live for the present, yet it is foolish to consume what you have when you have it. Saving should be instilled as a habit from the beginning so that when you no longer receive a fixed paycheck every month, you are not financially dependent on someone else. It is important to start early so that you can build a sufficient corpus for when you retire.

What do we need to save for?

We need to save for emergencies like unforeseen surgery. At least three to six months of salary should be set aside to deal with contingencies. We also need to save for our materialistic goals, like a home theater or as a down payment on a loan we take out when we buy a car or house. We need to save for our children’s education and also for our retirement. We need to save for sinking funds like car maintenance or home repairs. If we don’t save, where would all the money needed for the big and small things in life come from?

So how much should we save?

Saving is not easy, we do not have the habit and nobody has taught us to save. How much to save depends on our lifestyle and our financial expenses or obligations.

You will enforce your savings efforts if you decide on a time frame for your next goal, which may well be buying property or rebuilding your home.

To begin with, one must set aside at least ten percent of his monthly income for a rainy day. Then you can increase it to 20% gradually. But still, at the end of the year you will realize how little you have saved and that alone is not enough to meet all your savings requirements!

So how do we save enough?

One way to save is to reduce our expenses. Ask us if what we are about to spend is really necessary. Then, if you have taken out loans, try to be debt free as soon as possible. You have no idea how much of your hard-earned money is reaching the banks, or rather down the drain, as interest on those loans. Consolidating your loans will leave you with more money to invest.

Remember the old adage, money begets money. Investing is what will make you rich. Invest throughout the market in diversified funds. Seek the help of a financial manager or portfolio manager. You can buy stocks, put your money in mutual funds, or buy market-linked insurance policies. You can periodically invest in a SIP. Real estate is a great way to build massive wealth.

Money is synonymous with power. It will grow rapidly with systematic savings and prudent investments. The time to act is now!

Remember! Money saved is money earned!