Keep every Dh1, will change and surprise yourself
Remember when you were young that you had those coin banks? Small savings and donations of cash generally made their way to fancy containers of cash and helped us accumulate our own wealth.
Start doing it again, for the sake of fun. Store every Dh1 coin you get as a change and keep placing it in a box, jasper jar, or anywhere you like.
Just don't withdraw anything for a year and you might have enough to fund a music concert ticket.
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| 100 US Dollar |
Living from paycheck to paycheck is not the best way to have a life that is financially stress free. Many of us, however, are guilty of doing this. Why? Well, it might be because we are often consoled that we don't gain enough to save first.
It is our costs that are on an auto-pilot mode rather than savings. But developing a saver's attitude and getting our financial health in order is not difficult.
A bit of refit can certainly allow us to squirrel away some moolah and give a boost to our saving attitude.
So we're exploring ways in the third part of our #Be Moneywise series of how you can kick-start this saving journey-and feel good about it.
Make your savings automated
Automation operates not only for people like you and me, but also for governments.
A number of nations and businesses worldwide use standard choices that encourage individuals to save for pension or pay for insurance.
This implies that even before individuals are paid, a portion of the paycheck goes to the savings kitty.
Better Planning will make you a Millionaire
Recurring deposit: The best and most consistent way to save is to put a certain quantity into committed accounts that will assist you gain a little extra each month.
If you have not yet constructed an emergency fund, it's time to make use of a recurring deposit account. Most banks give this facility and you can open it alone with just a few clicks if you use online banking.
Start with as little as Dh500 a month, target higher or lower depending on your spending and stick to the habit for one year.
At the end of 12 months, you'll be pleased to see the outcomes. Of course, profit-sharing rates in the UAE are at the bottom of the spectrum, but you will still produce slightly greater than Dh6,000.
It's an amount that might have been spent on any lifestyle-related expenses if you didn't stash it away in a recurring pocket deposit.
The concept is to cut costs ruthlessly to begin your saving voyage whenever possible. Build an emergency fund.
“The goal here is to have resources for an emergency. So, if you face any financial shock like your car breaks down or medical expenses for a family member, you can dip into this account, there might be a number of reasons”.
Mutual Funds (Always beware of the market risks): Systemic investment plans (SIPs) provide an excellent way to build wealth. Managed by professionals at asset management firms, these are funds invested in a wide range of assets – such as equities, bonds, bullion, etc. – and yield far higher returns than a bank deposit can earn for you.
On average, on a long-term basis, equities have yielded double-digit returns and helped millions around the world to generate wealth
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SIPs from the mutual fund are an excellent way to invest, particularly for individuals who have a restricted amount to store each month. Bank deposits mean secure money parking. Even with the bank's interest, however, the value of our money is actually diminishing due to inflation.
"On the other side, mutual funds offer much more than bank deposits".
Mutual funds always offer the average price benefit of the dollar, which implies frequent monthly investments help you make better yields compared to lump-sum investments.
When returning an expatriate, SIP investments can be used for monthly expenses. Most houses with mutual funds enable systematic withdrawals, which is an excellent way to make use of accrued wealth. There are funds that provide annual returns of 15 percent.
“For example, your monthly savings enabled you to build a five million corpus. If you make one percent withdrawals each month, you're going to get 50,000 for monthly spending. The remainder will continue to grow”, added Shamsudheen.
Don't get cold feet when you're thinking about parking your money in assets or markets you don't know. Ask questions, read and think before you spend.
