5 things you really need to understand to enhance your savings!


We all dream of saving up to make those big purchases like a house or a car. But many of us fall short on these dreams, not because of lack of earnings. But because of a lack of understanding on how to pump up our savings plan.


Read on for 5 simple yet extremely effective tips that will help you enhance your savings.

1) Budget, Budget & Budget!

Having a plan or a budget, whether it is weekly, fortnightly or monthly will passively work towards enhancing your savings. A budget may not directly contribute to adding those extra rupees to your savings account, but it will help to build self awareness and control over your expenditure. It is really no surprise why every department in every company has a budget. Why should your life be different?

2) Diversify your investment instruments

Whether your prefer savings or investment instrument is fixed deposits, mutual funds, bonds, shares or insurance plans, the key to enhance your savings is to maintain diversity in your investments. Your savings depend heavily on how your investments perform and it is best to add diversity to your investments to maximize your returns, divide your risks, which will eventually lead to a pump up in your savings.

3) Avoid keeping a large liquid balance

Unless you need to maintain a large balance of liquid or hard cash, it is best to be invested away. Simply speaking, there are two reasons. One, your cash is likely to earn more interest if it is put away in a deposit or a fund rather than lying in your savings account. Two, investing your cash in such instruments means that you cannot withdraw it straight away from your account through an ATM or a cheque. This may help put a stop to impulsive spending that may not be required in your current financial situation.

4) Contribute a fixed amount every period to your savings

Many banks offer facilities where a fixed amount will be automatically deducted from your account at the end of every period, which is generally monthly. This is known as a recurring deposit. Whether you decide to put your money in a recurring deposit of simply move it to another savings account that you don’t usually access, putting a fixed sum of money aside will go a long way in enhancing your savings. Time flies, and so will your savings account balance!

5) Restrict your line of credit

Warren Buffet has publicly stated his hatred for credit cards and loans. You really don’t need to be Warren Buffet to understand that spending on your credit card right now means you will have to repay it back – with interest if paid late. Impulsive purchases made by drawing credit can be a massive hit to your savings plan. Don’t let attractive credit offers get the better of you.

  1. Banyan Financial Advisors says

    Great post. I think one more aspect which is necessary to consider while investing – Tax, else a person might end up giving a significant chunk of their saving to the tax man. If you are using mutual fund as a tool to save, then the following link may detail upon all these aspects associated with the taxation on mutual funds http://insight.banyanfa.com/?p=690

    Let me know what you think of it.


  2. Robin says

    Nice post!
    I completely agree budget play important role in saving. Creating a personal budget and writing down each & every expense we incur each month and by analyzing our finances to discover our money drains is the best way to save money and still live within our means.

  3. Stocks Tips Intraday says

    Great idea ! Mutual funds, fix deposits are some safe ways to investment. I definitely agree with the idea of avoiding large liquid balance because money as an entity can’t multiply itself, it needs some investment instruments.

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