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“Savings, like a sturdy foundation, underpins financial security. It’s the bedrock upon which dreams are built and uncertainties are weathered,” says S Ravi, founder of Ravi Rajan & Co. “The earlier one begins this journey, the more bountiful its rewards.”
To get started, here are essential thumb rules that can guide anyone aiming to build a healthy savings habit:
Start small, aim big: Save 10-15% of income
A solid starting goal is to save at least 10-15% of one’s income.
Whether it’s a modest percentage or a more ambitious goal, consistency is key.
Every rupee saved today lays the foundation for future security, or as Ravi highlights, “It’s a seed planted for a prosperous tomorrow.”
Follow the 50/30/20 rule for budgeting
A simple budgeting approach is the 50/30/20 rule. Allocate 50% of income to essential needs, 30% to wants, and 20% to savings and investments.
This structure helps maintain financial balance and reinforces saving without over-compromising on lifestyle.
Build an emergency fund covering 3-6 months of expenses
Financial uncertainties make it crucial to keep an emergency fund.
Setting aside three to six months’ worth of expenses ensures a financial safety net, especially during economic downturns or personal crises.
As economic conditions evolve, this habit protects individuals from unexpected setbacks.
Automate savings to avoid missed goals
Automated savings, such as systematic investment plans (SIPs), help maintain regular contributions toward financial goals.
By automating, individuals remove the manual step, making saving a priority rather than an afterthought.
Increase savings as income grows
A good habit is to periodically increase the savings percentage, particularly after a raise.
This incremental approach helps in amplifying long-term savings without affecting the current standard of living.
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