All of us like the good things in life. However they come at a price. As we all know, Thanos cannot be killed. However the impact can be reduced. Let us explore how:
1. Build a fun plan
It is a good idea to spend, considering all the discounts pouring in from all major ecommerce platforms. However, it is better to buy defined purchases than random ones. It helps to think in a structured manner and deploys spending properly. This helps to maintain the savings.
One of our friends does his annual shopping whenever there is a sale at his favourite outlet once a year. This helps to save more and at the same time buy more things which are needed.
2. Automate your investments
There are ways to automate your savings. It can be parked in a liquid fund once your account has more than one month’s expenses. Anything beyond one year’s emergency fund can be parked in equity/equity related investments.
3. Stick to a budget
Most of us to some degree believe that rules are meant to be broken. Therefore, many people do experience the fact that their incomes rise but expenses rise faster. As a thumb rule, 30 per cent of income needs to be saved. Most affluent families have built their financial foundation on this simple practise.
4. Increase the lifestyle less proportionately than the income rise
A common mistake is to increase spending without increasing incomes. A prudent way is to spend lesser than the income increase. It can be parked in a nest egg to take care of exigencies or more relevant goals like travel, that is on everybody’s bucket list. This helps to go through both good and bad times with equanimity.
One of our associates spent a high amount proportionate to his savings and was in a tight financial situation when the incomes dropped on account of health reasons.
5. Look at your key spending goals
A key spending goal can be a new car, a vacation or renovation of the house. When one is tempted to spend more, one can look at one’s key spending goals and control the temptation for the time being. The temporary delay in gratification helps to achieve the bigger goals.
You may not kill the spending emotion within you, however, a mix of focus and fun goals help to live well. Save money, have fun!
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