Bangalore 26/08/22, Jar, an innovative Indian startup, is on a mission to help Indians save and invest small chunks of their money into digital gold.
The company believes that if people manage their expenses properly and invest a small part of their savings, they would create a lot of wealth by the time they retire.
Although, investing is a very difficult process. However, money-saving tips by Jar app can be proved to be a lifesaver for you.
The very basic rule of finance is to keep an eye on your cash flow. Create a weekly or monthly budget and analyze your expense level.
Categorize your expenses into:
- Fixed or variable
- Needs or wants
- Inevitable or avoidable
Remember, we as humans, have unlimited wants and needs. Although, the money that we earn is limited and that’s why you should understand which expenses are most important for you.
Instead of making a boring excel sheet you can make a spending journal where you can describe which purchases you made and what triggered you to buy the product. In this way you will find out your common triggers that force you to buy unnecessary products. If you want to buy an expensive product, wait for at least 30 days to buy it. If you still feel a need to buy that costly product, go for it. This 30-day principle will stop your unnecessary purchases. Avoid purchasing a car if you don’t travel frequently.
Cancel all of your auto-renew entertainment subscriptions like Netflix, Amazon Prime, Spotify if you see not using them on a regular basis. Unsubscribe to retail companies’ newsletter which send you discounts, coupons or deals every month. Make a grocery list and only buy necessary things. Instead of ordering food which is both unhealthy and expensive, cook your own food. Also, unplug your electronics and appliances when you are not using them to conserve energy and money.
Don’t underestimate the power of a small amount of savings. So, at least put 10% of your income as savings. Don’t put all the money in the bank and try to invest in mutual funds, stock market, bonds and digital gold.
To invest in digital gold you can sign up on the Jar app. Jar will use your SMS to detect each penny you spend and round it up to the nearest 10. For example, if you bought something for 395 bucks, the app will round it up to 400 and invest the differential amount in 99.9% pure digital gold. The gold you buy is backed by the RBI-regulated trustee—IDBI. You can convert your digital gold into physical gold in the form of coins or jewellery. You can pause and resume your investments anytime you want.
You can also create an emergency fund which will help you in uncertain times. Savings accounts are best for an emergency fund. Some of the other financial instruments for emergency funds are liquid mutual funds that invest only in money market securities and FDs. Both the liquid mutual funds and FDs carry a very low amount of risk.
Although one of the major con of liquid mutual funds is that it takes 1-3 days for funds to be credited in your bank account. There are some mutual funds that allow you to withdraw Rs 50,000 per day, per scheme withdrawal from your debit card. Both FDs and liquid mutual funds have their own pros and cons so you should understand your risk appetite and then only invest money.
Once you have made your emergency fund, build a portfolio and diversify your investments between different asset classes such as equities, debt, and cash. Before investing the money understand your risk appetite, needs and goals. You should invest in all these financial instruments for around 10-15 years. Rebalance your portfolio every 6 months.
Due to the increasing inflation, everything will be expensive and that’s why you should save and invest money regularly. Pay your credit card debts on time to avoid paying late fees and high-interest rates. This will improve your credit score. Pay your costly debt first and avoid tax-efficient loans like personal loans. Check your credit card statement to ensure that you are not paying any extra money.
Moreover, build as many industry-relevant skills as possible. We all have seen in the pandemic that you shouldn’t rely on just one income level. That’s why you should always learn new skills and try to build various income sources.
