There was a time when I had to pay for everything I needed. Believe me, it is something that actually hurts you, especially for middle class people. Once you receive your payment at the end of the month or a week, you start making your monthly or weekly budget. Before even a week has passed, you find more than 2/3 of your income vanishes. I have always found that keeping money in your pocket is somewhat difficult than spending money. And I am sure everyone would agree with me.
Image credit: copacool / 123RF Stock Photo
However, if you have to change this momentum of spending, you unquestionably need to save money. You got to show a certain degree of will power and determination to curb your spending instincts. I want to tell you a little secret. I will show you how you can make your banks pay for all your bills without spending even a pie from your own account.
You might know this secret, but you probably never realized its importance, or never believed in it. Don’t think that I am making you walk through a page on some silly Mandrake funny stories. This is real, and I have done it, and; therefore, I guess I have every right to speak about it.
There was a time, when I rode the same path, whatever I earned, felled short of my budget. The story would get repeated every month. The more I tried to resist spending, the more I became frustrated because I was not able to resist my desire to spend. Then, one sunny morning, I thought, instead of resisting my urge to spend, I will save a small amount of money. And that worked.
I started saving a small amount of money every month, and the habit of saving money became my nature over a period of time. When I began watching my money grow, I enjoyed saving, and with it I also became passionate about savings. I would like to add something here. I was not saving money inside my personal locker. I was, in fact, saving it in my bank savings account.
As my money grew I heard about fixed term deposits, the idea fascinated me. I found out that banks were willing to pay up to 9% per annum, which was pretty. Some might say that the interest rates are too low, and they will get a much bigger return if they invest somewhere else.
My advice to them would be to start your investments in banks. You will learn the concept of investments. Banks do teaches you, though, they don’t conduct classes, yet, you learn how the money behaves.
What happened with my money in the bank?
I kept certain funds in the bank’s fixed deposit, and that meant that I received 9% of the principal amount added onto the principal sum. Imagine, if you put $1000 as term deposit, you will get close to $90 as interest, which can be used to pay a small expense. Likewise, if you raise $10,000 and decide to put on a fixed term deposit, you will receive $900 annually.
Now that is not a small sum by any means. If you are a traveller, you can jolly well use that money to go to any Asian country to spend your vacation, every year. The more money, the greater the return. If you can resist the temptation to spend, you will be able to save more. Every year the money grows, and you can invest more to get more returns.
What I want to convey is that you can have your investments pay for all your monthly outgoings. But for that to happen, you will first need to start saving money. If you can’t save, you can’t have the luxury of investment returns. Though, it sounds particularly appealing, and there is no rocket science involved in it, yet, for many it is perhaps, the hardest exercise. For me, the banks fixed term deposits have worked wonderfully if you want the system to work for you, start saving today, and invest wisely.
By Rajiv Sighamony