Financial Planning: Five tips to help you overcome the fear of losing money
We tell you five simple ways how you can save more and not lose out your hard-earned money.
The biggest hindrance to investing money in order to make it grow is the fear of losing it.
To overcome the fear, we start saving money by putting it in 'safe' instruments like banks, fixed deposits, or in the form of gold.
If you consult any financial advisor, they will say invest in some financial instruments.
We tell you five simple ways how you can save more and not lose out your hard-earned money:
1. Start investing early: This is not something you might be hearing for the first time. However, we still not follow. But it is utmost important to start investing as soon as you get your first salary.
This way you will get enough time to manage finances for your long term. The early you start investing, more returns you will get at the time of maturity. Simplest way is investing in Systematic Investment Plan (SIP) through Mutual Funds. It will help you in developing habit of investing and saving money.
2. Needs vs Want: This is very important to consider for someone who is a fresher and recently got a job. When your salary comes, naturally you want spend on parties and buying something which you want but not need.
Try to separate both: what you actually need like a house may be say 15 or 20 years later or a secured retirement life. But, at the same time you want to buy a gadget costing around Rs 50,000. So, isn't it better to save that Rs 50,000 for your house or for emergency?
3. Consider "Risk" factor: While you are investing money, always consider what all risk could be possible. Firstly, make sure your family is fully secured if anything happens to you.
Also, at the same time, create an "emergency" corpus which can be useful at the time of uncertainities.
Another factor you need to keep in mind is inflation. Your returns on investment should balance out after including the inflation.
4. Focus on your long term goals: For instance, your short term goal is to save for your child's education . Like every other expense, education fees will also increase over time. So the sooner you start, the easier would it be for you to save up enough to fund your child’s education
But, amid all the education planning, you must not forget that you are getting old too and the age of retirement is getting near with each passing year. That is your long term goal.
Do not compromise on your own retirement planning because you were too busy saving for your children.
5. Stay invested: In a hurry to get money, the biggest mistake we commit is withdraw money early. For investing, you need patience. The power of compounding money works only if we stay invested for a long period. The early you pull out money, less returns you will get.
With these five tips, you can easily save more without losing your money.
Disclaimer: This story is for informational purposes only and should not be taken as an investment advice.