Golden Rules of Financial Planning For Beginners

Advisor July 10, 2021

A dime saved is a cent gained. A penny saved is a penny earned. Bet you’ve all heard those lines a million times. But what’s amazing is that these age-old expressions are still relevant in today’s time. After all, growing wealth begins with savings, and who doesn’t want to be wealthy!

Mufid Majnun/Unsplash | To build wealth, you must save and invest at a steady pace

Speaking of growing wealth, to do so, you must invest a good portion of your earnings in high-yielding businesses or assets. The benefits you reap from such investments can help you meet your long-term goals. But that’s not it! You also need to be aware of the right ways to save and spend money in your day-to-day life to ensure you can accumulate enough to invest. Remember, every penny you save can help you invest judiciously.

As someone just starting their savings journey, there are a couple of small things you can do every day to ensure you’re on the right track for achieving your desired financial goals.

#1 – Start saving early

You can read that again! As a beginner, it’s your responsibility to begin saving as early as possible in life. Even the little things can change the entire game for you. Saving up bit by bit will not only develop a healthy habit but will also provide a much-needed head start to your future endeavors. With time and more funds, you can easily intensify this routine and witness an instant and rapid development in your financial savings.

Micheile Henderson/Unsplash | Save up more than half of your income, and whatever remains can be used for expenses

#2 – Save first, spend later

This is quite a general yet crucial tip for all financial beginners out there. The first and foremost rule of savings is to spend what remains after you’ve saved out of your income. If you’re working the other way round, you’re definitely going to mess it up big time! You should ideally practice saving up more than half of your income, and then whatever is remaining can be used for expenses. Easy peasy, right?

#3 – Keep a close eye on your bank accounts

Many of us hold multiple bank accounts. Without a close watch, managing all of them can become a challenge. Therefore, make sure you keep a regular track on the bank statements of your accounts on a regular basis. See if there are any extra charges added or deducted due to miscellaneous reasons. If you spot such charges, contact your back and ask them for help to reverse and avoid them in the future. Also, check the penalty on the minimum balance and take the required actions if necessary.

Jonathan Cooper/Unsplash | Keep a regular check on your bank accounts to see if any hidden charges are applied

Wrapping up

It’s like they say, once you see it, you can’t not see it! Once you start paying attention towards every small transaction, you will automatically build the habit of saving well. And needless to say, the end result will make you proud. The moment you find the right motivation to build your wealth, start working in that direction and you’ll come up with newer and even better ideas to save more.