Savings - The ultimate tool to be financially free and create wealth.
The first money lesson I taught my daughter is the concept of savings.
Saving for rainy days, what we normally call emergency funds.
Savings for living a life with no tension while going to sleep. This is my favourite one, saving with goals. I call it “NO TENSION FUND“
Savings for investing.
Generally, people think that savings can be increased by earning more. Yes, it is true but not without controlling your expenses. Controlling your expenses depends on your
Lifestyle.
Overall Thought process.
No matter how much increment you can do in your income/earnings, if you are not able to control your expense, you will not be able to save more.
You can also read the article below for understanding the benefit of savings in case of a stock market fall
Spending less is a behavioural thing. As Morgan Housel Wrote in his book, The Psychology of Money -
Saving is the gap between your ego and your income.
When I say spend less or control your expenses, it has nothing to do with cutting your basic expenses or buying inferior quality goods or services. You should start cutting down the expenses which are done because of our fragile egos, because of an urge to show-off, because of fear of missing out.
One more kind of expense you should control, the ones for which you don’t have money. That is the one for which you will have to take credit/debt/loan. Such expenditures, unless it is an emergency must be avoided at all costs.
No doubt we all must constantly learn new things and try to increase our active income, but in order to create wealth saving is the ultimate tool.
Even an average person with extraordinary savings can be financially free. On the contrary, a person having a high income but no savings will be a financial disaster sooner or later.
Here is another reflection you can read to understand what is the real meaning of being frugal
Here is a tweet by Vishal Khandelwal to summarise it with a picture and a quote.
All the best. God bless you
❤️ Neeraj Arora
और हाँ, सीखते रहें, क्यूँकि सीखना शुरू तो जीतना शुरू 🚀
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