1. #1

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    Are you saving enough money? How much Money Should I save?

    Am I saving enough? This is the most important question that every individual needs to ask oneself. It is important to earn a handsome income but it is equally important to save. Investment follows savings. Investments can happen only if savings are good. This means that saving money is a pre-requisite for wealth creation. Many people earn handsome salary or income from business or profession but donít save enough. The end result is that savings look paltry and wealth creation does not start. Money just flies from their bank accounts.

    One of the enemies of savings is the demonstration effect which has influenced savings in a major way among Indian households. If you check most of the people in India own a mobile which is not proportion to their average monthly salary. In fact the mobile cost in many cases is more than 100% of one monthís salary. Such expenses are being made only because of demonstration effect. This means we are buying products which we are not supposed to. Many people justify such expenses in the name of necessity.

    Second reason for lack of sufficient savings is absence of accounting of money. Just as companies have their books of accounts, we also need to have our own books of account. But this very rarely happen, despite of most of the people having access to technology. We donít track our expenses well and as a result of this it is not possible to ascertain what our expenses are. Many a times only when money flows out of bank account completely, we get to know that there is no money left and we have no option but to wait for salary or some other source of income.

    Last but not the least there is a feeling among people that the source of income will never dry for a person. Retirement is something which will happen to others only. With traditional pension giving jobs disappearing it is important to ensure that there are enough savings in place to take care old age requirements.

    So what it is that we are supposed to do?

    Simple, take a pledge that no matter what, we will save 25% of our income under any circumstances. This does not require any great skill just simple determination.

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