Some people are worried on their cash-outflows and feels depressed on why can’t they save money even though they are trying all the best possible ways to minimise their expenses!
For those, who are getting irritated on expenses, follow this simple path to control your cash flow –
- Open a seperate bank a/c. That bank a/c should be used for investments only
- After receiving salary, “Pay Yourself First”. First allocate some money to investments and spend the rest
- By allocating 20-30% to investments inculcates savings habits and it would continues life-long if you follow this path.
- Spend only 70% of your income-30% should be mandatory for investments.
- out of the 70%, allocate 50% to “Needs” and the remaining 20% to “Wants”
- Try to minimise 20% wants gradually
- The savings habit of 50:30:20 should be adjusted to 50% needs,30% investments and 20% wants(which could be decreased gradually)
By maintaining a separate bank a/c and transferring 30% for investments would do wonders in the long-run. You may not enjoy the benefits in the short term, but after 1-2 years, when you see your mandatory transfer of 30% from your income, you will be surprised to see such a huge corpus which you can’t save voluntarily.
By automating 30% of your income to other bank a/c, which is to be used only for investments, you would surely gain huge surplus in the long run. Try this at once!