It is easy to become a millionaire, just start saving

The day we get our first paycheck and start earning, we tend to spend everything. We go on a shopping spree and buy things that we don’t need also.

Though shopping is fine once in a while, but taking care of your expenditure is also important.

It is also important to start saving at the right age. It is said that 50% of your income should be used for utilities, 20% should be kept aside for savings and 30% for entertainment and splurging.

Saving won’t only make you more confident but you will also become financially disciplined. While others start saving at the age of 27 or 35 to buy a home or a car, you’ll have enough money to make bold choices without hesitating.

So, here are 4 benefits of saving early!

1) Emergencies
You need to save for unforeseen emergencies. You need money when you fall sick, or something breaks down at your home. Saving money will help you in the long run, so that you don’t have to think twice about going to a doctor or paying for utilities.

2) Crorepati retirement
When you start saving at the age of 21 or 22, you would probably end up being a crorepati by the time you reach 35 or 40. Regular and disciplined savings could go a really take you a long way. You can save increments, bonuses, fixed monthly income along with fixed savings. Do the calculation right now and check how much your savings would be 10 years from now!

3) Loans
We save not to die with our money but to meet goals in our lives. Goals like marriage, buying a home, buying a car and travelling the world. If you don’t save, you probably have to take a loan. When you have to take a loan, you either take one from family, friends or the bank. Around 90% of the times, we take a loan from the bank. But, taking a loan from the bank is not a piece of cake. You have to have re-pay too. So, would you like to take a loan or utilize your own money freely?

4) Additional source of income
If you have made huge savings, you can diversify your investments and create an additional source of income. Buy another home and give it out on rent, invest in stocks or another company. The options are abundant and you won’t regret your choices if you invest smartly!

So what are you waiting for? Begin saving now!

(Rajiv Raj is the Director and Co-Founder of www.creditvidya.com)

(Image: Thinkstock)