Lower middle class families in particular have more spending from their source of income. Clothing, food, tuition fees, hospitality, sightseeing, treatment, entertainment for children. In this case, the cost is more than income. What will be the savings for them in such a situation?
Buying essential is difficult, let alone saving. While the habit of saving makes life simple and easy.
Victims say that it is not a big deal how much money is made. How much is saved from what you earn is a big thing.
As long as you know how to save money, you will never be sad about money. When there is a shortage of money in life, these people also become strangers.
Life becomes destitute. Living daily can also be difficult. And dreams can be incomplete.
So, the only way to avoid all these problems is to save money. To save money, it is necessary to divide the money into three parts.
Essential expenditure – 65 to 75 percent income
Daily expenses include clothes, food, electricity, water, school fees for the child. Since such expenses are included in essential expenses, 65 to 75 percent of the total income should be allocated for it.
Spending on income – 10 to 15 percent of income
After that, it is often necessary to gather between friends and family. Apart from this, money is needed to go somewhere. Therefore, to ensure that there is no shortage of money for such things, a fixed portion of 10 to 15 percent of the income should be allocated in advance.
Aging expenses – remaining 20 percent
Doing this costs about 80 percent of the income. Now the remaining 20 percent. If this 20 percent is still reserved for retirement, it will not run out of funds in the future.
But the easier it is to say these things, the more difficult it is to implement them. A special plan will have to be made for this.
So how to reduce expenditure by 65 percent
For this, first, it is necessary to reduce the necessary expenses. Needless expenses should be avoided. If you go to the gym, you can cut costs and run for an hour in the morning and evening in a nearby park. You can cycle around the house. If you have to go out with friends, you can save money by arranging it at home. After drinking outside, you can drink in Happy Hour. It also helps a lot in reducing unnecessary expenses.
Not only that, instead of going to a restaurant to eat a variety of dishes at home, using public transport instead of a taxi, not buying unnecessary items, buying clothes to take care of daily expenses can be very less. is.
Spend 15 percent of your income without hesitation
Apart from daily expenses and needs, there are some things in life that everyone wants to fulfill. We also need money to fulfill such desires and aspirations. The money saved for this can be deposited in a bank offering good interest.
Therefore, to meet this interest, it is advisable to deposit 10 to 15 percent of the total income saved in a bank that pays good interest even in a normal savings account. The account card should not be taken so that the account money is not spent. Because there is no point in spending money without a withdrawal card.
Similarly, you should avoid spending money unnecessarily and shopping while going on vacation. Also, try to stay in a cheap and well furnished hotel.
To save 20 percent income as much as possible
Life after retirement is special for everyone. After retirement, a person becomes physically and mentally weak. Due to which the person should depend on others. To prevent this, even after retirement, about 20 percent of the total income should be set aside for emergencies.
For this special attention should be paid to two things, first is the cost and second is the cost of saving. Because as the years pass, the price increases and the value of money decreases.
Therefore, keeping this in mind, it is necessary to increase your savings by about four percent every year. For this you can add land or invest in fixed deposits or shares. Debt reduction can be done as soon as possible. Because it is debt that can affect savings in the long run and can cause mental stress.
