When it comes to savings, every small step matters. Even something as seemingly insignificant as noting down your expenses or automating your savings can go a long way – provided you keep at it, consistently. Saving money is a powerful tool that can pave the way to big financial rewards. Having a financial cushion allows a person to weather unexpected expenses or emergencies without resorting to debt or financial stress.
One such small step that can hugely impact your financial success is how early you start investing. “For example, say you’re investing ₹10K per month at a 12% interest rate per annum compounded monthly. If you start at 25 years of age, the amount you’ll have by 60 is ₹6,43,09,595 versus if you start at 30 years of age, the amount of money you’ll have by 60 is ₹3,49,49,641. That’s how much difference a mere 5 years can make! It’s a small step, but the impact it can have – as you can see – is tremendous,” said Satyajeet Kunjeer, Founder and CEO, Deciml.
Saving money also enables one to achieve long-term goals, such as buying a home, starting a business, or funding your children’s education. Kamaljeet Rastogi, Chief Executive Officer, SahiBnk, Powered by Manipal Business Solutions said the benefits that follow from saving money extend beyond financial security. “Saving instills discipline and financial responsibility, helping people develop healthy financial habits that can last a lifetime. It also provides a sense of empowerment and control over one’s financial destiny, reducing reliance on credit and enabling us to make informed financial decisions,” Kamaljeet Rastogi
For example, if a person saves just Rs. 1,000 per month for 30 years, earning an average annual return of 8%, their savings would have grown to over Rs. 12 lakhs at the end of the period. This exemplifies the incredible potential of consistent saving and the compounding effect it can have on wealth accumulation.
However, saving may not come naturally to everyone, and it is better to equip oneself with the right strategy. As per Kamaljeet Rastogi, individuals should compare the offers and returns on savings accounts when choosing a bank. Working professionals can strategize and ensure routine savings through careful distribution of their income between checking and saving accounts.
The big financial rewards that saving money can bring are truly remarkable. Through the power of compound interest, even small regular contributions can grow into substantial sums over time. By taking small steps towards saving, one can enjoy the advantages of financial security, discipline, and empowerment.
Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 21 Aug 2023, 01:49 PM IST
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