In a country like India, we have always been taught lessons of saving of money from our parents, but only savings will never make us reach to our targets, in fact till the last decade we were mostly never sat any targets for money. We were kept on savings it and we were kept on spending it for unnecessary and unplanned expenses, therefore in the must face expenses called retirement and our children’s education we sometimes remain empty-handed.
Why these happen?? Two reasons... first our money never works for us, second we mostly don’t know how it works for us.
But don’t worry, as someone said it’s never too late to learn anything. Trust me it’s simpler than any easy subject you were liked in school. We need to set reasons for our saving money if you have more than one reason then make it separate saving for each reason.
We also need to understand inflation, we must need to. Inflation means the rate at which prices are rising of the things we are using. Example – in the year 2000 Punjabi samosa’s price was 5 Rs, which now increased up to 20 to 25 Rs, means now you are paying 4 to 5 times higher price of the exact same samosa... That’s Inflation.
Inflation will reduce the value of your money, in India average Inflation rate is 5% - 7%. So your today’s 100 Rs value will be 93 Rs to 95 Rs next year, Inflation is an evil that eats our saved money’s value year by year, as our saved money in the cupboard or savings account has never grown but Inflation does.
How can we fight to this evil?
We need to start investing our money in a source where it grows with a better interest rate than the Inflation, following this procedure for a long term gives the benefit of compounding effect, sources for investments are FD(fixed deposit), RD(recurring deposit), Mutual Funds, Real estate, Gold, LIC, PPF(public provident fund), etc.
Therefore keep on regular investing your some part of your saved money so we can give a tough fight to Inflation.