April 26, 2023

10 ways to building wealth through everyday financial discipline

Do you aspire to build wealth while working for a nine to six job? But not sure how? Congrats, you’ve reached the right place.
(But before that, check out our Youtube channel. Here’s where we share insight driven content that will educate you and help you in your journey to financial freedom. Check it out here (LINK), subscribe to our channel, and come back to read the blog!)
In a world of uncertainties, being financially aware, putting hard stops to your expenses, and maintaining consistent investments can help you avoid financial troubles.
Today, we’ll together understand how to manage our money effectively, saving a significant portion of our salary, and making smart investments to build long-term wealth.

Plan and track your monthly budget

Understanding our cash flow is vital to gaining control over our finances, which means keeping a track of every single rupee that is being spent. We should create a monthly budget plan by categorising our expenses and diligently tracking our spending. Maybe allocate a portion of our salary to a separate account for savings and investments? Why not!

Invest a portion of your increment

When we receive a salary hike or appraisal, it's tempting to indulge in various purchases like those 200 dollar shoes! However, instead of splurging, consider investing a portion of the increment. Setting up a monthly Systematic Investment Plan (SIP) ensures regular savings. Investing is crucial because inflation gradually erodes the value of our money. By investing in assets that outperform inflation, such as equity or gold, we protect our purchasing power and build a solid financial foundation.

Invest and save taxes

Explore various tax-saving schemes and investment options to maximise our savings. Employee Provident Funds, Equity Linked Savings Schemes, Life Insurance, and National Pension Schemes are some avenues that provide tax benefits while helping us save money.

Cut down on unnecessary expenses

One of the most overlooked methods of saving a significant portion of our salary is by reducing our overall expenses (it’s the age of minimalism!). For instance, considered carpooling or using public transport instead of relying on our car for every commute? Review mobile phone or WiFi bills and opt for a more affordable plan. Let’s ask ourselves at every purchasing point like a grocery store, “do we really really need this? Or is it just a temptation?”

Get health insurance

Unforeseen health emergencies can drain our finances. Let’s protect ourselves and our loved ones by investing in a health insurance policy. Paying a monthly or annual premium for health insurance is a prudent financial decision that provides us with coverage during emergencies. Additionally, under section 80D, we can claim tax deductions for the health insurance premiums paid.

Being mindful when shopping online

Impulsive online shopping can quickly eat into our savings. A helpful technique is to leave items in our cart for a day or two before making a final decision. This helps us determine if we genuinely need the product. Another idea! Replacing the habit of visiting e-commerce apps with investment apps. Stock like you shop! Check out ‘Upstox for Investors’, you’ll know what we’re talking about.

Avoid late fees on credit cards

Missing credit card payments can result in significant late fees and interest charges. Let’s use reminder apps or set up automatic payments through our mobile banking app to ensure we never miss a payment deadline. By being prompt with credit card payments, we avoid unnecessary fees and prevent our debt from snowballing.

Practise smart grocery shopping

It's surprisingly easy to overspend on groceries if we're not mindful. Create a shopping list before heading to the store, focusing on essential items and avoiding impulse purchases. Be aware of marketing tactics at the billing counter that tempt us with additional products. By sticking to our list, we'll stay within our monthly budget and avoid overspending.

Utilise your kitchen

While food delivery apps offer convenience, they can also strain our finances and health. Limit eating out to a couple of days per week and use the remaining days to cook meals at home or prepare them in advance. By reducing our reliance on food delivery and dining out, we'll save a significant amount of money in the long run, for real!

Reduce electricity consumption

Being conscious of our energy usage not only benefits the environment but also saves us money. Develop habits like switching off lights and appliances when not in use. Opt for energy-efficient options like CFL or LED lights, which consume less energy and have a longer lifespan compared to traditional bulbs.
Building wealth requires discipline, smart financial decisions, and consistent savings and investments. Let’s start by creating a monthly budget plan, reducing unnecessary expenses, and investing in assets that outperform inflation. Rather than succumbing to the temptation of increased earnings, increase your investments to secure a stable financial future. Hope this helps!

Disclaimer

The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.

Never miss a trading opportunity with Margin Trading Facility

Enjoy 2X leverage on over 900+ stocks

Upstox Margin Trading Facility

RELATED ARTICLES

NPS Post Office 2023 - Interest Rates & Account Opening

India Post has come up with some exceptional facilities like deposit schemes, savings accounts, etc. Besides, you can now invest in Government implemented [National Pension Scheme](https://upstox.com/saving-schemes/nps-national-pension-scheme-india/) with your local post office. With post office NPS, you can plan your savings through pre-determined contributions and investment plans. This Government aided scheme invests your contributions to [equity and debt funds](https://upstox.com/learning-center/mutual-funds/equity-vs-debt-mutual-funds-differences-which-is-better/). The final pension amount will depend on the performance of these funds.

Pradhan Mantri Jan Dhan Yojana (PMJDY) 2023 - Benefits & Online Apply

Equal access to financial tools and a proper understanding of them is essential for a nation to progress. After all, such a thing is a fundamental right for all citizens in a democratic nation. The government of India recognized this need for financial inclusion and came up with a solution for it in the form of the Pradhan Mantri Jhan Dhan Yojana or PMJDY.

EPF Interest Rate 2023 & How to Calculate it Online

EPF (Employee Provident Fund) is a savings-retirement scheme devised for salaried employees under the Employees Provident Fund and Miscellaneous Act of 1952. The management of this provident fund is overseen by the Employees’ Provident Fund Organization or EPFO. In this policy, the employee and the employer contribute monthly. Every monthly installment is added to the EPF corpus till the retirement of an individual, and the interest is accrued at a stipulated rate on these deposits. Upon retirement, this EPF corpus encompasses the monthly contributions of the employee and the employer, including the interest generated over the years. The fund collected can also be withdrawn in certain situations as decreed by EPFO, like during unemployment. Thus, the scheme of EPF has been designed to act as a financial safety net for when an employee does not get a monthly paycheck.

NPS Vs PPF - Which is Better & Difference

Retirement can be the best or worst time of your life, depending on how well-prepared you are for it. On the one hand, you will have enough time on your hands to do whatever you want to do, without having to worry about work. On the other hand, you no longer have a regular income from work, which may mean not having the necessary money to meet all of your requirements. Add to that inflation and increasing life expectancy, which can continue for a long time. This is why retirement planning is so important. Unless you are eligible for a pension when you stop working (and sometimes even if you are), you will have to invest in retirement schemes to live out your golden years comfortably without stress. That’s why the government of India has made retirement savings possible through specific schemes they offer. The two most essential schemes among these are the [Public Provident Fund](https://upstox.com/saving-schemes/public-provident-fund-ppf-interest-rate/) or PPF and the National Pension Scheme or NPS. Moreover, these schemes come with tax benefits that make them more attractive to citizens. They are covered under Section 80C of the Income Tax Act, meaning you can claim a tax benefit of up to INR 1.5 lakhs by investing in either product. However, that’s where the similarity ends. They are very different in terms of tenure, returns, lock-in periods, and maturity amount usage. This article will explain the features of both these schemes and their similarities and differences in more detail.