Saturday, 1 October 2011

Small savings help you to lead debt free life

Savings starts where you put off all your debts. This is the old theory. But if you did not start small savings, you cannot get rid of all your debts. I just heard a story of a computer expert who could not avoid his debts and the debt is growing day by day. He is getting a good salary. But he doesn't know how to spend it out and how to manage his life with the salary he is getting.  As a well employed person he naturally gets offers from multinational banks and the person having a number of credit cards from different banks. He spends a lot with his credit cards and now he could not pay off his debts (Debt free) with the good salary he is getting.

The story of the young computer expert must be an eye opener for everybody. We should analyze our expenditures and try to balance the income and expenditure. Our young people should see dreams; big dreams which could make them grow to better financial future. They should study to cut off unnecessary expenditures.  Once a priest told in his homely that he had asked a young chap who got his first salary about how he decided to spend his salary. The priest got a quick answer that the young man would buy a costly mobile. He asked again about the next month’s salary and the answer was fast that he would buy another mobile, because the technology is changing day by day.

This is the mentality of our young people. We should be responsible in our spending habit. We should list out our expenditures every day and at the end of the month it should be analyzed and find out any unnecessary expenditure. If so you should avoid it or reduce it. You can easily reduce the frequency of eating out and such similar unnecessary expenditures. Once a lady started to note down all her expenditures and find that she had spend around one third of her monthly income for cold drinks, which she was interested to drink. Once she found out the fact and tried to reduce the number of cold drinks.

List out your expenditures are the first step of saving and the second step, put off a certain percentage of your income, say 10% for saving, invest it in any bank as recurring deposits or any equivalent saving methods. Think that you only have 90% of your income and try to live with it. Forget about the remaining 10 % and deposit in any investment scheme. Slowly you can pay off all your debts with this small savings and you now created a habit of saving. You started to create wealth.

Avoid spending unnecessary with your credit cards and pay off all your credit card bills in due date. You should spend only that much money you could pay off in due date. If you could not pay off the credit card bill in time, you should pay a heavy interest.

Think well before you spend your counted bread, your monthly salary and your financial life will be healthy and you could fulfill all your financial goals.


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  1. […] billion of it on credit card accounts. There’s no way to calculate the effect that the amount of debt has on our economy, but there’s no denying that it has an effect on interest rates and the […]