Saving & Budgeting

Saving sounds serious, but it's actually super simple! Saving is just the money you keep after you receive income and pay for your expenses.

Think of it like this:

Income (Money In) - Spending (Money Out) = Savings (Money Left Over)

So, if you get ₹500 pocket money (income) and spend ₹300 on snacks and movie tickets (spending), you've saved ₹200!

Saving is the opposite of spending. It's choosing not to spend some of your money right now, so you can use it later.

Why not just spend all your money? Because saving helps you reach your financial goals! We talked about goals before, but saving is how you make them happen.

• Short-Term Goals (The Near Future): Saving helps you buy things you want soon, like that cool video game you've been eyeing, a new pair of headphones, or saving up for a birthday gift for a friend. These usually take less than a year to save for.
• Long-Term Goals (The Bigger Picture): Saving is crucial for bigger things later in life, like going to college or university, buying your first bike or car, travelling, or even starting your own business someday.

Without saving, reaching these goals is much harder, if not impossible!

Saving isn't just about having money left over by accident. It's about building a good habit, like exercising or studying regularly.

Best Ways to Build the Habit:

• Save Regularly: Don't just save when you feel like it or only if there's money left at the end of the month (often there isn't!). Try to save a small, fixed amount every time you get income (like ₹50 or 10% of your pocket money). Consistency is key!
• Pay Yourself First: This is a powerful idea! It means as soon as you get income, you immediately set aside your savings portion before you start spending on anything else. Treat your savings like an important bill you have to pay – to your future self!

Making saving automatic and regular makes it much easier to achieve your goals.

Okay, you know you need to save, but how do you manage the rest of your money? That's where a budget comes in!

A budget is simply a plan for your money. It helps you:

• See where your money comes from (income).
• Decide where your money should go (spending on needs and wants, and saving for goals).
• Track your actual spending to see if you're sticking to your plan.

Think of it like a map for your money journey. It helps you stay on track and reach your destination (your financial goals) without getting lost or running out of fuel (money!). It's not about restricting fun; it's about being in control.

Making a budget can seem tricky, but here's a popular and easy guideline to start with: the 50/30/20 rule. It suggests dividing your income (after any taxes, if applicable) like this:

• 50% on Needs: This covers your essential expenses – things you absolutely must have (food, necessary transport, essential clothes, school supplies, rent/housing if applicable).
• 30% on Wants: This is for the fun stuff – things you enjoy but don't strictly need (entertainment, hobbies, eating out, gadgets, trendy clothes).
• 20% on Savings & Debt Repayment: This is crucial! At least 20% should go towards your savings goals (short-term and long-term) and paying off any money you owe (liabilities). Many experts recommend aiming for even higher savings if possible!

This is just a guideline! You might need to adjust the percentages based on your income and priorities. The important part is having a plan.

Creating a budget is the first step; making it work is the real challenge!

• Prioritize Savings & Needs: When planning your budget, figure out your savings goal ("pay yourself first") and your essential needs before you allocate money to wants. Make sure the important stuff is covered.
• Track Your Spending: Write down what you spend money on, or use an app. This helps you see if you're actually following your plan. You might be surprised where your money goes!
• Stick to It (Mostly!): Try your best to follow your budget. If you overspend in one area (like wants), try to cut back somewhere else or adjust next month's budget. It takes practice!
• Review and Adjust: Your income or goals might change. Look at your budget regularly (maybe once a month) and adjust it as needed.

Sticking to your budget is how you ensure you reach those awesome financial goals you set!

It might seem like saving means missing out now, but think about the feeling when you finally reach a savings goal! Whether it's buying that game you wanted for months or knowing you have money set aside for something important, achieving a savings goal feels great!

It gives you a sense of:

• Accomplishment: You did it! You set a goal and achieved it through discipline.
• Confidence: You feel more in control of your money and your future.
• Security: Having savings means you're better prepared for unexpected things.

That feeling is a powerful motivator to keep saving!

Think about your daily habits. Do you buy a snack or drink every day? Do you always take the bus when you could walk sometimes? Do you pack lunch or buy it?

Small, everyday spending choices add up significantly over time. Buying lunch for ₹100 every school day might not seem like much, but that's ₹500 a week, or roughly ₹2,000 a month! Packing lunch from home, even a few times a week, could free up a surprising amount of money for your savings goals.

Look at your regular small expenses and see if there are areas where you could cut back slightly to boost your savings without feeling deprived.