Typically , young accountants don't reckon for saving because they do not know its importance . They have not enough responsibilities . So , they do not care for this . They think to enjoy today but this rule is most suitable for Western and it does apply on Indians . But young accountants and all other youths should understand the importance of saving . For rainy days like leaving of jobs and not finding good jobs , accident , diseases and for solving other financial problems , it is very essential to save some money separately from your family expenses . I am giving some tips which I also act upon and advice you to use them for happy life .
Tip # 1
Save by Setting your own target
First of all make your family budget and after spending all necessary expenses , calculate the value of saving and determine it for investing it saving separately bank's saving account . Control on your expenses and never use your set saving for expenses . This will increase your habit to save some earning every month . Suppose , you can start saving from Rs. 500 to Rs. 1000 per month and this saving must be keep separately and apply this rule tightly .
Tip # 2
How much do you save ?
If you starts to save money , then next question will arise how much do you save ? Saving must be according to your earning capability and responsibility of family nurture . I can divide it with following way
Status -------------------- Earning -------------------------------- Saving
1. Unmarried between Rs. 5000 to Rs. 10000 per month ---------- 20 % to 30% of income
2. Married between Rs. 10000 to Rs. 20000 per month ---------- 15 % to 20% of income
3. Married between Rs. 20000 to Rs. 40000 per month ---------- 20 % to 25% of income
4. Married more than Rs. 40000 per month --------- -- 30 % to 40 % of income
Tip # 3
Convert Saving into Investment
According to financial Technicians ," Saving should not keep in bank's saving account or current account because because bank gives 3.5% interest on saving account and 0% on current account so for getting earning it is very necessary for you to convert saving into investment . For investing , you can buy equity shares or bonds . You can also invest money in secure fixed deposit account of government bank .
Tip # 4
Ploughing back of Profit
If you belong to middle family and your earning is limited then , you can use the finance technique which are using big companies . Ploughing back of profit means . First you have to earn profit from your saving , then reinvest this profit in different investment projects . With this you can increase your earning with multiple way .
Tip # 5
Compare risk of investment and return on investment
Before invest your money , you must see what is the risk of your money and what is the return on investment . It is general rule that high risk and high profit but you must not take high risk , if you are Incognizant or ignorant in the field of finance . If you are interested to take risk , the first of all consult your C.A. or finance consultant .