"Where is the life we have lost in living?”
This beautiful T S Eliot quote perfectly designate our present relationship with money and savings. With countless individual finance texts, periodicals, talk shows and blogs bestowing information, one ought to be self-assured in the knowledge that their finances are in place, right? But today’s job market is as unpredictable as it can be and you never know when you are going to be caught up in the vicious cycles of layoffs, recession and other factors that can result in job loss. Even those with 10 plus years of experience suddenly find themselves unemployed. Though there is so much info out there, it is enough to overwhelm the average person.
Let’s just comprise the essentials of saving for blue periods in 8 well-meaning tips:
i. Start Saving Now
When it comes to individual finance, this could be considered the most powerful words. It doesn’t matter whether you think you have plenty of time ahead, you have just started earning, you will start once you get a better job among others. Let’s look at it from an absolute left brain angle. A rupee you save and invest in your twenties today will have almost five times (or more) the value, assuming a seven percent yield throughout all periods.
ii. Set Your Monetary Concerns First
Managing a home obviously costs more when more folks are using utilities, grocery and putting more wear and tear on the house itself (including contents). These expenses are not set in stone and individual needs vary. The focus of preparing for hard times is obviously to maximize savings and to eliminate debt as much as possible.
iii. Think Through Finance Rules
As said before, these things are not set in stone and when living under the same roof (be it family or friends or just flat mates), there must be a basic understanding about the common expenses. It is better to clear every due bills in the first week of getting your salary, after which you can plan for monthly expenses and savings.
iv. Create Timelines
In the real world, monetary arrangements are seldom flexible. Based on these, tax and lawful suggestions you obtain as well as individual inclinations. Whatever the necessities, please ensure you have an effective agenda for you and the other close family (or whoever you are living with) that set financial and behavioral rules you expect met. To settle any outstanding dues, the first thing to do is make a time frame for it and resolve to do it in that particular period.
v. How to Save
We are not talking about your PF account here. Have you a Fixed Deposit, Recurring Deposit, Savings Account or Insurance? Well, having one or more is always a sure shot safety measure for job loss phase. If you think that you don’t earn enough to make a sizable saving, you can start with a small savings account or an RD. You can put in amount as low as INR 500 per month.
vi. Start With a Meeting
Gather the household together for a discussion, especially if you are the only or one of the earners. Talk about the situation and your investments planned for the blue period and how they are intended to be utilized. No matter how or what the agreement is going to be, it must start with a complete discussion of requirements, predilections, monetary terms, and most of all, ways to make whatever you have decided on bump-free and positive. Tough times breed resentment. Hence it is important that you keep the communication flowing.
vii. Be prepared to keep a track of expenditures
Post meeting and collective agreement, retrofit your domestic budget to keep track of high end consumption, utility expenses, groceries, fuel and such like for expense sharing and perhaps tax purposes. At the end of the day, having your loved ones with you can with any luck have numerous rewards that go beyond simple buck-calculations.
viii. Contemplate the end game
People you love and with whom you can be yourself can lift you up even during the bluest phase of your life. Family is more than sleeping under one roof. If one is facing critical financial crunches, the others could consider helping them re-plan their funds or offering them direct help to pick up the pieces again. Here you need smart tax and financial planning.Other Useful Reads :
- Savings Bank Accounts v/s Current Accounts
- Steps to Develop a Healthy Saving Habit
- Which Type of Account Is Usually the Most Liquid?
- Does Your Returns Get Affected by Auto Sweep Accounts?
- Banking Mistakes You Cannot Afford to Make
- What is Inactive or Dormant Bank Account?
- NRE Savings Account v/s NRO Savings Account
- Should I Go for One Bank or Many When it Comes to Keeping my Accounts
- Top 7 Smart Money Saving Tips