A financial crunch can sometimes arise at the most unsuitable times. And what will you depend on in such a situation? Naturally, it is your savings that shall save the day.
Yes, there are many ways in which you can increase your savings. But many forget about a simple yet important factor i.e. your household income and savings.
This term covers the income of all the members of your family. The income includes not just the salary but other things such as earnings from a small business, investments, etc. By considering all of these sources, the total yearly income for a household can be calculated.
When you take into account all the expenses that a household incurs and subtract it from the household income, you get the household savings.
Thus, it is the expenses that affect how much a family can end up saving, hence, it is important to have an understanding about both.
Here are some of the things that account for a family’s expenses and saving:
Place of Residence
In a small village, Raju watches a movie for a price as little as INR 30-40. In Mumbai, your travel fare to the theatre might just be double of this amount.
Where you live affects your expenses in a huge way. From the prices of basic commodities, charges for electricity, water supply, maintenance, everything can differ across locations.
On the other hand, a city can offer great career opportunities. With the right skill set and aptitude, one can certainly earn a much better salary in a developed city. Thus, a location accounts for both, how much one spends as well as how much one earns. In this way, it significantly impacts a household’s earnings and savings.
A significant illness always brings a significant financial burden. Health services do not come cheap. And when it comes to a family member’s well-being, one naturally wants to go for the best treatments available. If you are unprepared for such a crisis, it can severely deplete your savings and earnings.
Hence, it is better to be prepared for such a situation. Various health insurance policies can help a family in securing both their health and finances.
Usually, children and elders are the ones who remain financially dependent on the other members of the family. When it comes to elders, they can still work towards being financially independent by making investments in various schemes such as a FD investment for senior citizens and even mutual funds if they are more open to risks.
For the children too, it is important that they are educated about simple financial things from an early age. This helps them develop the habit of saving early, besides being aware of investment opportunities.
Everyone in a family can start taking a greater financial responsibility in terms of trying to contribute some amount to the family’s income. From simple things like giving tuitions to starting a small business venture, to making responsible financial investments – all these things add considerably to a family’s income and savings.
At the end of the day, we all want to live a happy and meaningful life with our family. By managing to increase the household savings, things become better for every family member. With the finances in place, you can now look to live in comfort and fulfil your dreams. Be it simple outings to a mall or even a world tour, every family deserves to have some fun.