It may sound like a aggressive idea if we aim to double the size of our nest egg in the next 5-10 years of time period. However, it is still possible without taking any unnecessary risks or striking gold. The only things you need is keeping a tab on your savings, a level head and patience.
1. Spend less than you earn
You may have heard this many a times.
Save at least 3-6 months worh of your cost of living into an emergency fund.
After that, start investing the rest of your savings.
Though many financial planners say it's a good idea to have six to nine months of your normal expenses stashed away.
2. Save a minimum of 10% of your salary
For your bright future start investing as early as possible.
Give yourself the best chance for success by setting up automatic transfers to your savings and investment accounts.
Carefully consider your time frame when choosing investments.
Though saving 10-15 per cent of your income when you're between 25-30, is tough—especially when you have some financial obligations. But the retirement is a hugely expensive challenge, and the earlier you start preparing for it, the better.
3. Don't ignore the power of small savings
Do not underestimate the power of small savings. If you think it's not worth to save few hundred of rupees every week, take a look at how quickly it can add up.
Amount saved each week Total at the end of one month Total at the end of one year
Rs 1000 Rs 4000 Rs 48,000
Rs 2000 Rs 8000 Rs 96,000
Rs 3000 Rs 12,000 Rs 144,000
Once you get into the swing of things you'll find numerous ways to save money on just about everything you buy. And those savings will add up big time.
4.Earn extra through freelancing
Freelancing on the side is something anyone can do. Without any much experience you can be caricature artists, violin instructors, marketing consultants, and much more. And for this you don't need to set up an LLC, or build a website to start making money on the side.
Moreover, instead of getting another job, you can also turn your hobbies into an income. Do you enjoy writing? You can become a freelance writer and earn a decent amount every time you write an article. Or you could start your own blog and earn an income off of it.
5.Cut your monthly budget drastically
Here are some ways which you can implement immediately to cut your monthly budget drastically.
* If you can't pay in cash, don't buy it
* Give up smoking (or at least cut back)
* Eat out less.
* Bring your lunch to work
* Look for items at discount
* Plan out your holiday spending budget in advance, then stick to it
* Give fewer gifts, and be more creative about them
* Take public transportation
* Instead of visiting malls and spending there, seek out free activities for you and your kids
* Rent a movie instead of going to the theater.
* Vacation at home
* Buy your next car, don't lease
* Buy a used car rather than a new car
* Cut down on alcohol
* Cancel your gym membership and walk to work instead
Disclaimer: All information provided in this article is for informational purposes only.