SAving your finances

Saving your finances the smart way

Finwize Investments - Kiran Cabral

Financial Planning - A plan to achieve your financial goals using different financial instruments, policies, guidelines and choices.

Need for Financial Planning

Financial Planning

Protect lifestyle of family

Protection against the uncertainty

Balanced Asset Allocation

Investment and Protection

Inflation Cost of Education / Medical increasing

exponentially

Rising Life expectancyestimated to increase from 77 to 85 in next

decade


Inflation means Rs 10,000 would be…

25937

67275

174494

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

10 20 30

10%

8%

6%


How to do your Financial Planning

Define & prioritize your goals Set Goals

Risk Appetite and Protection needs

Investment and

Insurance

ChangingLifestyle, changingFinancial

Goals

Create & Monitor

Savings Plan

Project income, expenses & investments

Current

Status and Gap Analysis


Setting Financial Goals


How to achieve these GOALS

Pay yourself first.

$ Savings should be your priority, so don’t just say that you’ll save whatever’s left over at the end of the month.

$ Deposit savings into an account as soon as you get paid.

$ An easy, effective way to start saving is to simply deposit 10% of every salary in a savings account.

$ This works well and requires little thought; over several years, you've a tidy sum in savings. Over decades, you'll be a millionaire.

Mr A and B save 10% of their Income and spend 90%

SPEND 90%

SAVE 10%SAVE10%

SPEND 90%

SAVE 10%

SPEND 90%

SAVE LATER

SPEND FIRST

SAVE FIRST

SPEND LATER


How to achieve these GOALS

Change your attitude to your mortgageThe most expensive item you are ever likely to buy is your home. If you're not in the privileged position to pay cash, make sure the loan you use to finance it is the best available. For example, go for a fixed interest rate instead of floating rate of interest.

Clear your credit card debtCredit cards offer a convenient way to pay for goods and services but if you can't clear the balance every month, consider a low-cost loan as an alternative..

Stop using credit cardsCredit cards are not inherently evil; it's all about your self control. If you use them responsibly (i.e. completely pay them off every month), you can benefit from them. The reason most credit card companies make money, is because people end up spending money that they don't have. You're better off foregoing the promotions that credit card companies use to lure you in (cash back, introductory APR, airline miles, and so on). Finwize Investments - Kiran

Cabral

Keep a record of your expenses - Keep a small notebook with you at all times. Get in the habit of recording every expense and saving the receipts.

Make a budget - Write down a budget so you’ll know each month how much you can spend on any given thing or category of things.

Cut the cost of your fuel bills As the global demand for power threatens to outstrip supply, prices are rising. Change from petrol to LPG - you just pay less every month.

Cut your phone bills There are scores of cheaper alternatives from and packages available with your network provider. Also broadband internet gives you access to low-cost dial-up services that give you access to cheaper calls. Send sms using free sms services like 160by2, way2 sms.com.

Make a shopping listFood shopping forms a significant part of our monthly outgoings and the supermarket is where the bulk of the money is spent, because we overbuy and we realize it only when we checkout that the bill is often more than expected. To circumvent this, simply make a shopping list, and STICK TO THE LIST. Finwize Investments - Kiran

Cabral

Don't buy designer labelsCelebrities are given expensive clothes to wear. You're not. At the end of the day, and let's face it you may only wear the outfit once, can you justify paying hundreds of rupees over the odds because a top designer has had his or her name sewn on the label? And can you honestly say you can tell the difference at a distance between a Rs 6000 designer bag and a Rs 1000 one from the market? Think about it.

Sell your clutter on eBayTake this quick test: You're at home. Open a cupboard. Look inside. If it's full of clothes which have outgrown you or you haven't worn, for, let's say, three years - you don't need them. So why not sell them to someone else who does? Ebay, the online auction house, has opened individual sellers to a world of buyers. And you can flog anything for the cost of a small commission.

Use your talent to earn extra cashLet's face it, if you're not a pop star by the time you reach your 20s you're never going to be. But you may be able to use your talent as a guitarist to teach other wannabes.


Book your own 'package' holiday onlineThe popularity of High Street travel agents is waning as more and more people warm to the benefits of researching and putting together their own holidays on the internet. If your holiday consists of flights, accommodation, transfers and possibly car hire, then take this test. Order a brochure from a leading holiday company and work out the price of your holiday including all the complicated supplements. Now go online and, starting with the flights, try to put the same package together.

Learn to say 'no'It's easy to capitulate to the demands of a screaming child in a packed market on a Sunday evening. But don't do it. Similarly, how often does a 'swift half' after work turn into a Rs 500 drinking session? Saying 'no' a few times a year will do wonders for your bank account.

Don't pay full price for theatre ticket.Opt for a morning show instead if an afternoon or night show. Morning show tickets are available at multiplexes for under Rs 100.Finwize Investments - Kiran

Cabral

Ask yourself: do I really need this? Imagine the scenario. You have a meeting and you've got an hour to kill. You find yourself in a department store and there's a sale on. You pick up a beautifully packaged crockery, And it's half price. Now, stop! Ask yourself: Do I really need this? Exactly. Now, put it down and walk away.

Walk/cycle to the station/workIt maybe a bit of hippie notion to many people but it's free and healthy. If you can’t walk all the way walk for 45 minutes that is what the body needs too and then take a transport home.

Cut down your drinkingA few beers after work a few nights a week is a financially debilitating state of affairs. Set limits and stick to them.

Pack up smokingNever mind the health implications, the guilt and the smell, your 20-a-day habit is costing you nearly Rs 36,000 a year. Pack it in.


Cancel your gym membershipIf you pay your Rs 3000 a month by direct debit and you use the gym three times a week, great. If not, cancel your membership immediately. You'll soon save enough to buy your own bike/scooty/nano. Consider running home or to the nearest railway station from work three times a week. It's free.

The three-for-two trickNow, there's a lot to be said for buy-one-get-one-free deals, especially if they pass the 'Do I really need this?' test. Then there's three-for-twos; a particularly cynical way of stores to entice shoppers to buy an extra item they would not otherwise buy. The 'offer' is always priced into the deal so do your sums and shop around.

Buy clothes and presents in the salesSo you need a new suit and the one you like comes in at a cool Rs 5000. Wait! The chances are that you can pick it up in the sale – and there's always a sale just around the corner. The same applies for birthday and festival presents. Buy in bulk in the sales and you not only save money, but you enjoy stress-free pre-festivals and no last-minute birthday worries.

Avoid extended warranties Electrical goods are more reliable than ever. If your new computer won't last three years perhaps it's not worth buying in the first place. Think about it: how many times has your fridge broken down in the last five years?



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SAving your finances