Hello Readers!

Financial Security means the capability of an individual to save and invest enough that they do not have to depend on their income to accomplish their big financial goals. Generally, individuals plan their finances in order to achieve this financial security before they retire.

People plan their finances and add strategies like saving more, investing for their goals, becoming debt-free, and more that helps them to reach their financial security.

However, this much strategy is not enough to reach there. You need to tweak your behavior a little too. Here is what more you can adopt in your behavior to reach your financial security.

Adopt The Japanese 80% Rule 

The Japanese people are all over world know for technology and more than that they are know for their honesty. However, their one of the habits, popular as The Japanese 80% rule is also known and adopted by many people. The Japanese when they eat, they fill 80% full rather than filling their stomachs 100%. This rule helps control over-eating and keeps health in check.

Financially Experts say that individual must apply this effective rule to their lifestyle, that means they should have a lifestyle that include 100% of their ability to spend. Instead, they should restrict their spend maximum to 80%. Like for example if an individual has planned to buy a car and going to spend 6 lakhs, then he must look for a model closer to Rs 5 lakh.

Making this rule as your habit will boost your ability to save and will help you maintain a lifestyle that allows you to live comfortably in situations when your regular income stops. Thus, making you feel financially secure.  

Restrict Monthly Loan Repayments To 20% Of Your Income

There are many expenses for which we generally move towards availing loan for these expenses, buying a car, house, paying for your ailing parent’s medical bills, and many more. While taking a loan the biggest mistake that we commit is to take a loan which requires 50% or more of our monthly income as monthly loan repayment. This generally happen while availing a house loan.

It is ideally advised that in case if you take loan, make sure that your loan monthly repayment should not exceed 20% or a maximum 25% of your monthly salary. Planning your loans in this way will help you save enough and spend on your lifestyle.

Investing Is Necessary To Grow Your Wealth 

Saving is a good habit and should be practiced on regular basis, putting your savings in fixed deposits give security to your savings but it does not provide growth to it. For wealth creation, you have to put your saving in instruments that gives compound return exponentially. For this, you need to research and analyze about different investment instruments that gives growth to your savings like mutual funds, share market, and many more. Although these investment instruments are market-linked and thus associated with risk, but at the same time these instruments provide a good growth to your savings.

There are two behavior traits you need to follow – start investing in growth assets like Equity Mutual Fund and secondly, inculcate a regular habit of saving and investing. You can do it easily by investing through SIP in Mutual funds.

Financial security may not seem important to many who have a habit of dealing with pressures of everyday life and spends. However, when these people start to think they realize that their regular earning is not going to remain regular forever. Time period of nearly 20-25 years will come in their life also when they have to survive on what they have saved and accumulated till. Thus, it is always advised, it is important to maintain a balance between your current consumption and future lifestyle. It is important to ensure a financial security for every individual before they retire.

For any kind of query, you can contact us at Shri Ashutosh Securities Pvt Ltd., we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).