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Bluff yourself into saving

Start early with small amounts. Focus on a goal. Force yourself to invest. Vivina Vishwanathan reports.

india Updated: Jun 22, 2012 20:41 IST
Vivina Vishwanathan

To save may not come naturally to you. Here are five tricks that will help you comfortably navigate the maze of financial compulsions.

Start now
If you want to save money, start doing it right away. Don’t wait and plan for the right time when you earn enough to save.

It is better to start immediately with whatever you have since the earlier you start, the better your corpus will look. This will help you develop a habit of keeping aside a certain portion of your earnings in any condition.

Start small
Start saving small amounts and see how it works.

“By setting smaller goals and meeting them, you automatically get into the process of saving,” said Sumeet Vaid, a Mumbai-based financial planner. “And every time you achieve the goal, you become more confident and aspirational."

Let your bank deduct money upfront
Every month 12% of the basic component of your salary goes to the provident fund. Over years, this accumulates into lakhs of rupees. How did you manage to accumulate a corpus? Well, simply because you never missed it. Letting your boss or bank take money off the top of your salary for retirement or some other goal will make sure that you will never miss it.

“Getting electronic clearing services activated on your account on a date soon after your salary is credited is not a bad idea,” said Arvind Rao, chief planner, Dreamz Infinite Financial Planner. You could start with a simple recurring account with your bank and go on to invest in mutual fund systematic investment plans.

Focus on your goal
You need to first zero in on your main objective. What is it that you want to save money for? It could be anything from buying an air conditioner to building a corpus for your retirement. Pick one and start working on building a corpus for it.

“It is always important to have a goal,” said Pankaj Mathpal, managing director, Optima Money Managers Pvt Ltd. “Whether it is big or small, if you have something to aim for you will surely make it.”

Start saving EMI amounts when loan is over

If you have been writing cheques for your car loan or any personal loan for the last two-three years, continue doing it even after you have repaid your liability. And send that cheque to a savings or investment account. You were already writing cheques and just by tricking yourself, within months you will see your savings grow.

“Once you are free from your liabilities, saving the money that is left will be easier while sticking to your expenses that you where running on during the EMI,” said Rao.