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Understanding Impuslive Buying and It's Impact on Your Savings
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
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At some point in time, you may have experienced impulsive buying. This is a sudden urge or feeling that you absolutely need to buy that one product lying on your online shopping cart or the shelf of a shopping mall. Many ensure to make a list of things to buy before entering a store, however, somehow, they walk out with ten other products that were not mentioned in the list. This is another example of impulsive buying.
With the rising popularity of online shopping, impulsive buying has become a more common phenomenon than ever before. Note that when it comes to your finances, this is not the best move. So, if you are into impulsive buying, then you must ensure to stop this immediately and begin saving so that you can achieve your financial goals. Not having adequate funds to meet your important financial goals may make you opt for a loan, which means higher monetary outgo in the form of interest.
Discussed here are some crucial tips that you may consider following to create a substantial fund in a bank savings account.
You must first write all your short-term, medium-term, and long-term financial goals. Doing so allows you to make your plan more tangible. Next, compute the corpus requirement and deadline by which you need the corpus for every goal. Once you have estimated the corpus and time frame, take the help of an online calculator to plan out the monthly contribution you must make towards a savings account to meet your goal on time.
Also, you must focus on cutting down on unnecessary expenditures, if any, and enhancing your savings. Cutting down on your weekend outings, coffee from cafes, impulsive shopping in a mall, etc., can make a major difference to your budget.
You must be wondering, why open a new bank account when you already hold an account? The account where you keep your money is basically a spending account. You must open a new bank account strictly for the purpose of saving for your goals and to build an emergency fund.
You must ensure to opt for the best savings account after comparing the different types of savings accounts available in the market. The bank interest rate on your new savings account must be higher than in your existing bank savings account so that you can reach your goals quickly.
One of the simplest ways of increasing your savings is by opening an online or offline recurring deposit account. The concept of recurring deposits is quite simple. All you need to do is choose an amount that will be deducted automatically from your savings account monthly into your deposit account. As the recurring deposit offers a higher interest rate than a savings account, you can also consider this saving mode for your goals.
Why is saving your money necessary?
Unforeseen expenses may often come up without any warning and borrowing at that moment instantly may not be easy. Imagine a scenario where you require instant money for a medical treatment on a weekend in the middle of the night. You cannot approach your bank or friends for immediate financial help at this time. Here’s where money stored in your bank account in the form of an emergency fund can help you. So, say “no” to impulsive buying and “yes” to savings for a secure and stable financial future.
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