(The above video is in Hindi language and if you are not familiar with Hindi language then read this article in your language to gain knowledge of money management system.)
#SipWealthCreator, #MoneyManagement System, #Personal Finance, #Save Money
Hello Investors,
Welcome Back,
We have already created two videos (Articles) on Wealth Creation process/Money Management System/ Personal Finance so if you haven't read that then click on the below links and read it first so that you can learn the concept perfectly.
1.Money management System - amiri se introduction 3 steps me - earn, save andinvest
2.Money Management System -10% savings to SIP wealth Creation with real worldexamples
Now, This is the 3rd part of the series, and in this article we will be learning, how we can save 10% money from your salary or income on regular basis. In short, in this video we will be discussing about 7 rules that will be helping you in saving 10% money from your income.
There are two types of people found in our world. 1st ordinary people and 2nd those people who have stand apart from this list of ordinary people and have become special one. I used to call this special category people as an "Investor Mindset" people. There is a clear cut difference found between ordinary and investor mindset people, ordinary people always knows how much their monthly income is but they don't know about their monthly expenses. On the other hand Investor mindset people are well aware about their monthly income and expenses. and this is the reason investor mindset people are well at managing money. Investors always write down their income and expenses to remember it. They note down their smallest ever expenses too. In real world too all the successful people have adopted this very good habit of writing down their income and expenses. Not only successful people, government itself, small and big companies, big institutions, and every organisation write downs their income and expenses to remember it. The elements like Profit and loss statement and balance sheets exists only because of this reason. This example is enough to explain how important for you to write down your income and expense. And if you want to become investor you too have to make habit of writing down your income and expense. This way you will be able to see, where you are spending your hard earned money and what are the pockets that you can cut down your spending and/or completely lower the spending.
There are 7 points that are very common about spending. And that's why we have made 7 Rules that will help you in 10% money from your salary or income.
1. Take control over "Parkinson's Law" -
This is world renown principle that explains that its a human tendency that whenever there is increase in the income the person tends to increase his/her expenses too. So if you want to be financially successful then you have to be aware of the "Parkinson's law" and make conscious efforts to keep your expenses lower than your income.
2. Differentiate between "Needs" and "Wants":
See, most of the expenses are falling under two categories. first is "Needs" and second is "Wants". You have to give more importance to your basic needs like "Food, Cloth and Shelter" and you have to pay less importance to your wants because your wants are limitless. Your wants will be always higher than your income. for example, imagine you have to go from one place to another place then, your 1st desire will be you must have shoes, then from shoes to cycle, then from cycle to scooter or motor cycle, then from motor cycle to car and then from car to plane your desires (wants) will keep growing. So control your desires and all those desires that you are not able to fulfil you have to postpone it. This way you will be able to fulfil your small desires and every fulfilled desire will work as motivation to fulfil bigger desires and all those desires that won't be fulfilled, will work as your goals. This way you will be having double advantage.
3. Try to minimize the common expenses:
There are few expenses that falls under common expenses, like cloths,
Shoes,
Artificial Jewellery,
cosmetics,
decorative items and
going outside for taking lunch and dinner.
so, you have to lower the expenses on these above items. (Remember, I am not telling you to live the life of miser, but you have to consciously manage your expenses on above items so that you can live comfortable financial life).
4. Don't Show off:
You must not waste your hard earned money on show off, because at the end of the day you will realise that show off is the most foolish thing. Remember, our aim is to become rich and wealthy and not looking rich and wealthy because once you become rich and wealthy you will automatically get recognition of being wealthy. So focus on your goals of becoming rich and wealthy and you will be automatically look wealthy. so stop spending money and show off to get attention and appreciation from others.
5. Always have shopping list ready:
This is very small thing, but very important aspect. Whenever you go out for shopping then you must have list of items that you need to purchase from the shopping mall and don't buy any additional item from the mall.
6. Postpone the buying decision to next 30 days:
You must not buy any item that is not a basic need and its just a want or desire instantly. Instead you should wait for the next 30 days to validate the requirement of that item and if after 30 days you evaluate the situation and requirement of the item and if it fits then you take buying decision else skip it or postpone it by making it future goal. More on, you have to first save the money to buy the item during this 30 days so that you won't fall in debt trap.
7. Never mix Insurance and Investment:
You should never buy useless life insurance products. Life insurance is only taken for the earner of the family and its not for everyone else. The person who is earning must have the "Life Insurance" as it will give safety to its family that in unwanted circumstances this life insurance will be helping his family. But buying life insurance products of other family members who are not earning anything is just waste of money and buying kids insurance is the total rubbish concept because kids never needs life insurance. Instead invest this money and see how fast it grows and helps you get financial freedom.
So, These are the 7 small rules that you followed successfully then you will be able to save 10% money easily and investing this 10% money gives you financial freedom using our "Smart Mutual Fund SIP".