Millennials tend to get a bad rap as a generation thatdoesn't save money. And it's true to a certain degree. All of us love splurging and partying and assume that spending today is better than saving for tomorrow because who knows what tomorrowholds for us. But what's also true is that?we all need emergencysavings to protect ourselves from unplanned expenses. And we all need retirement savings to pay ourbills later in life.
Like with most other things, there are plenty of myths and misconceptions when it comes to money too. For instance, some of us were told to save up at least 10 per cent of our salaries every month. However, hoarding cash andtucking it away in banks isn't going to help anything and if you have a moderatesalary saving up in this manner wouldn¡¯t do much.?
The sane thing to do is tounderstand the nitty-gritties of saving money and the multiple factors that come into play. On that note, here are some important myths that surroundingsavings that need to debunked:
Reality: Many of you in your 20s keep delaying saving any money assuming that you¡¯ll need to do it only after the age of 30. But that¡¯s acostly mistake. Start considering something as simple and efficient as asystematic investment plan (SIP) of a mutual fund. In this scheme even you start saving Rs 2,000 a month from your salary, there be a triple-fold increase in the amount after a certain defined period. In SIPs, your amounts get invested automatically at fixed intervalsand there are chances of continuing the investment for a longer period arehigher. SIPs undeniably enable you to invest in a disciplined manner.
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Reality: According to Business Today, a PPF account allows you to claim deduction under Section80C. Second, the interest income is tax-free. Third, the lumpsum received at the end of the tenure is also tax-free. Stop thinking thatyou are too far away from retirement; it's always a good idea to start savingearly.
Reality: Sometimes, you can't beat money-saving deals, online orotherwise in the form of flat 50& or 40% off. Unfortunately, those have thepotential to ruin your savings. Buying in bulk, couponing, and spending more toget free shipping are other common sales tactics you've likely been a victim of but they onlyadd upto bigger losses in the larger scheme of things. Mapping out what you needas opposed to what you want will help you save a lot of money. That does notmean you live a frugal life, it¡¯s about being controlled in your expenditures.
Also read:?How To Manage Household Finances Better In The Middle Of A Pandemic
Reality: An easy way to improve on saving is to start following a budget. That way, you'll have a clear sense of where your money goes every month, and you'll be able to easily identify spending areas you can cut back on. And if you're not saving money because you really can't afford to, and you have no reasonable expenses to cut, then looking for an alternate income source is a good option.?
Reality: According to Financial Times, borrowers often don¡¯t apply for a personal loan assuming it involves a relatively longer processing time and a cumbersome approval process. But personal loans are usually disbursed within two to seven working days because submitting the loan application is done with minimal documentation depending on the bank. Additionally, those with existing loans are always eligible for personal loan.
Also read:?Did You Have To Take A Salary Cut Due To The Pandemic? Here Are Some Ways To Manage Your Money
Reality: A credit card certainly makes it convenient to spend. Users are not very bothered when swiping a card or shopping online because they don¡¯t feel the pinch of paying hard cash. However, a lot also depends on how financially disciplined an individual is. There's the monthly interest on the amount spent and a good credit score to consider. Unless absolutely necessary, avoid using a credit card.