Category Management: Saving, spending and borrowing are ways of moving money over time. The right balance depends on reading the timeline of your life, which is highly personal, as the right answers are not clear. For example, young people should save more to plan for retirement. Young people should also spend more, so that they can travel, learn and enjoy everything life has to offer when they are young. In anticipation of college tuition, a family with young children may want to save.
On how to strike a balance between saving and spending, Prithvi Chandrasekhar, President – Risk & Analytics, Incred said, “The most useful thing you can do to manage Pennies It is better to better plan your comprehensive life. As you become clear about the changes your family will go through in the years to come, the true tradeoff between spending and saving quickly becomes apparent. Without that perspective, money management would be confusing and intimidating.”
Advising earning individuals to avoid Shiny Object Syndrome, Vineet Khandare, CEO and Founder, MyFundBazaar, said, “It is easy to overestimate one’s contribution in retirement as there are so many shiny objects financially within reach. Instead, be sure to stick with your course. Investing yourself.”
Saving Vs Investing: How To Make Money While Sleeping?
Vineet Khandare further said that one should earn money even while sleeping, “Making a small but regular deposit in a savings investment that will compound, will allow one’s money to grow while one is asleep; every pay-check/month they are in time.” Don’t deposit less than a stipulated amount in this investment to see manifold returns along with it.”
Abhijit Shukla, CEO and Director, Tarlity, highlights the importance of goal setting, saying, “List your financial goals and divide them between short-term goals, medium-term goals and long-term goals – prioritizing all of your goals will help you will help list them into respective categories automatically.”
5 ways to balance savings and spending
When asked about the top measures that can help an investor strike a proper balance between their savings and expenditure, Mayur Shah, PMS Fund Manager, Anand Rathi Advisors, listed the following 5 ways:
1]Goal Setting: Define your goals to achieve in both the short term and long term.
2]Goal Focused Investments: Have dedicated investments for a specific goal so that there is no misuse or diversion of funds for other goals.
3]Priority to various savings: Priority should be given to regular savings and efforts should be made to avoid expenditure which can be deferred and not immediate.
4]Liquidity for Financial Crisis: Investments for emergency and short term goals should be kept liquid and balance in slightly high risk return assets for the long term.
5]Allocation to Asset Class: At least 30% of the income needs to be saved and channelized into the investment asset class.
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