Everyone must save at least 10% of monthly income

Everyone must save at least ten percent of their monthly income. Whenever there is any income from anywhere, set aside one tenth of it in advance. Believe me, you will manage your expenses with the remaining 90 per cent of the amount. Wait before buying a newly released item and don’t pay the premium price. Always try to pay for things with cash or debit not credit cards. Minimize credit card debt or any other debt if you have. Always track your expenses and try to cut down your unnecessary spends. Your savings should be at least 10 per cent of your monthly income. Decide on your priorities while spending. If you are earning extra money it does not mean that you should buy more things, but it gives you an option to save more money for your future needs. What about the emergency fund? Depending on your income and expenses, this fund can be six to 12 months of the monthly income. For example, if you earn Rs 40,000 a month and Rs 20,000 goes into meeting your routine living expenses, then your emergency fund should be in the range of Rs 2 to 4 Lakh.
Emergency fund is an essential corpus of money that you must keep separate to tackle your future emergencies. It is a fund you can utilise at the hour of crisis and for unexpected or unplanned scenarios, not for your regular expenses. In a recent survey, 32 percent of youth showed interest in saving money instead of spending it. The young generation of India is interested in keeping money in the bank or at home. The economy may have started getting back on track after Covid pandemic, but the ghosts of unemployment and inflation are still lurking there. Perhaps this is the reason why the Generation Z believes in saving money for the future. Being a miser is absolutely a bad trait in a person, but it can be a good quality as well, when you are financially literate and you do not want to waste your hard earned money on unnecessary luxuries.
Financial literacy can make you rich. It is basically your relationship with the money you earn and how effectively you use it to improve your finances. Adopting proper budgeting, saving and investment is what financial literacy is all about. So step one is to make money, and once you have money or sufficient income, step two becomes most important i.e. to utilise that money to its greatest potential or to help you achieve your long term goals. World’s most successful investor Warren Buffett says, “Never invest in a business you do not understand.” Investment journey takes time, getting some financial knowledge or short term course is advisable. Starting from a small amount and for the long term is best practice. Starting an investing journey in the stock market has become so easy these days, it rarely takes ten minutes to mark your beginning. One just has to open a Demat account in their favourite stock brokers like HDFC or ICICI. And then things will take forward from there. It’s fairly easy. Always remember, managing your money is more important than earning money.