Savings are the backbone of any successful financial journey.
Before you think about investing, trading, or even wealth creation, you must first build the mindset that enables you to save consistently.
In this fourth article of the personal finance series, we explore:
Why most people struggle to save
The correct “savings equation”
Common mistakes people make
The importance of saving early
Where beginners should start saving
How to build a lifelong savings habit
The Fundamental Savings Equation
Most people follow this default flow as soon as they receive their monthly salary:
Income → Spend → Save (if anything is left)
This behaviour looks like this:
Income – Expenses = Savings
And this is the biggest reason why many never build meaningful wealth.
The moment salary hits the account, people rush to spend on:
New shoes
Latest smartphones
Fancy dinners
Impulse purchases
Online shopping
By prioritising expenses, savings take a backseat.
And then the cycle repeats every month: money comes in → money goes out → nothing remains.
This equation must be rearranged.
The Correct Equation for Wealth Building
Income – Savings = Expenses
This subtle shift transforms your financial life.
It means:
You choose to save first
You allow expenses to adjust accordingly
You build discipline every month
It might feel hard initially because it requires lifestyle adjustment.
You may need to postpone buying that new phone or wait longer for a luxury purchase—but that’s okay.
This adjustment is the entry price for long-term financial stability.
Common Excuses People Give for Not Saving
People often justify why they can’t save:
“I’ll start saving next month.”
“I don’t earn enough to save.”
“What’s the point of saving ₹500 or ₹1000?”
“I’ll save when my salary increases.”
These excuses cost you two extremely important things:
1. Habit Formation
The habit of saving is built through repetition, not through the amount saved.
2. The Advantage of Time
Small savings done early benefit from:
Compounding
Market exposure
Experience
Emotional discipline
Saving early—even tiny amounts—creates a lifelong pattern of financial control.
Why Saving Early Matters
Early in your career:
Savings may be small
Income may be limited
Expenses may feel large
But saving even ₹500 or ₹1000 every month teaches you:
Patience
Consistency
Market behaviour (if you invest over time)
Emotional stability during market ups and downs
Karthik shares that when he started investing early, even with tiny amounts, he lived through:
The Reliance split
Sensex crossing 10,000
Inflation cycles
Subprime crisis
Geopolitical tensions
COVID crash
This long-term exposure builds:
Conviction
Discipline
A calm mindset
The ability to stay invested despite volatility
These qualities cannot be learned overnight; they develop only through years of practice.
Where Should You Save Your Money?
Most beginners overthink savings instruments.
This leads to analysis paralysis.
They keep searching:
The best mutual fund
The highest return
The most popular SIP
The “ideal” strategy
And in the process—they never start.
The truth:
For beginners, starting is far more important than optimising.
If you're just getting started:
✔️ Save in your savings account,
✔️ or a fixed deposit,
✔️ or any instrument you understand.
The goal in the first few years is not high returns—
it is the creation of the savings habit.
Once your habit is strong and consistent, you can shift to:
Equity mutual funds
Index funds
SIPs
Other growth-oriented instruments
But don’t let indecision stop you at the starting line.
Key Takeaways
Save first, spend later
Even small savings matter
Build the habit early in life
Don’t overanalyse saving instruments
Consistency > Amount
Savings prepare you for investments, market cycles, and financial maturity
Final Thoughts
Savings are not just numbers—they are a mindset, a discipline, and a foundation for everything that follows in your financial journey.
Start early.
Start small if needed.
But start.
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