Life can be very tough without a proper saving plan. With a small amount of salary, can you save money every month? The answer is yes. To help you, we come with this article to provide some guidance about money saving. If you opent these three accounts, then, every month, you can save some money which help be helpful for upcoming days.
Why you need to open 3 accounts?
Most people draw their salary, spend their money, and save money from the same bank account. But this mistake slowly drains your hard-earned money. Experts believe that opening three separate bank accounts and using them for different purposes will not only help control your expenses but also increase your savings.
Which 3 accounts we are talking about?
First Account: Salary Account
If you’re employed, you likely already have a salary account. This account’s sole purpose is to receive your salary. As soon as your salary arrives, transfer it to the other two accounts as needed. This will give you a clear picture of how much money you have and how much you need to spend or save.
Second account: Savings account
This account should be solely for savings. Deposit a fixed amount of your salary, say 20%, into this account and let it sit. You can use this money for future investments in SIPs, fixed deposits, or other schemes. Never spend from this account. This can become the foundation of your financial security.
Third account: the spending account
Now comes the account from which you’ll spend your monthly expenses. This can be called a spend account. As soon as your salary arrives, first create a monthly budget and transfer only the amount of money you need to this account for the entire month. Pay rent, groceries, bills, travel, and mobile recharges from this account. This will give you complete control over how much is being spent.
If you follow this method every month, within a few months you’ll see a clear difference between your spending and savings. Setting aside savings from your salary will also curb wasteful spending. Furthermore, you’ll have immediate assistance in case of an emergency, as you’ve already built up funds in your savings account.