The research report by the Boston Consulting Group, titled The New Indian: The Many Facets of a Changing Consumer, Indian consumption expenditures are expected to grow threefold in the next few years, reaching a staggering $4 trillion by 2025. Yet, despite being a forecast of surging affluence, how much are we really saving is the moot point? According to the universal 50/30/20 principle, one should channel 50% of one’s income towards necessities, 30% towards miscellaneous spends and 20% towards savings.

Intelligent savings can be a one-way ticket to annual holidays, wistful indulgences and comfortable retirement. If you aren’t sure where to start, follow these five tried and tested methods.

Step 1. Know Your Goals

When you’re saving without a goal in mind, you can lose focus along the way. Consider what you’d like to buy with your long-term savings. Perhaps you’re inspired by the prospect of owning a luxurious seaside villa, achieving financial freedom, or living a lavish retirement. Of course, while long-term goals are great, they can be hard to measure in the short-term. Therefore, you should break down your long-term goals into shorter, achievable milestones – like paying off your existing home loan, reaching a target growth on your mutual funds or scaling to a certain monthly salary. Inspire yourself with visual aids like motivational wallpapers, hand-drawn posters or tent cards.

Step 2. Plan your Savings

Now that you know your end goals, work backward to see how you can achieve them. For starters, make sure that your goals are realistic and measurable. Then, decide how much you need to keep aside each month to accomplish each one. A long-term savings plan can help direct your efforts.

Step 3. Create a Budget

Given that your income is fixed, you need to find a way to be comfortable with whatever is left after reserving a basic amount for your savings plan. Browse through your bank statements to see where your money is predominantly being channeled and consider which expenses can be minimized. Everybody has frivolous spends that go unnoticed. Unused magazine subscriptions, an idle landline bill, a redundant club membership and more. Add these up, and you’ll likely land yourself a nice little bounty. Based on your observations, carefully forecast a budget for future spends, provisioning for every little expense and income.

Step 4. Stay One Step Ahead

It’s all well and good to create a fabulous savings plan, but it can come crashing down if you don’t have money to put into it. The best way to save yourself against your future is to set aside money now. Enable an auto-debit facility in your bank account to automatically transfer funds into a savings scheme every month. This way, you’re forced to save more, and on time.

Step 5. Scale Your Savings Plan

Granted, you may not be able to put lots of moolah into your future goals just yet. But you can always scale up over the years. As your salary increases, so will your savings.

By starting early, you can maximize your savings by the time you turn 50 and live out your golden years with a sense of financial freedom. Plus, by achieving your short-term goals, you can reward yourself along the way.


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