Money Saved is Money Earned!

By Prerna Chandra · Tue Mar 10 2026

In today’s world, many of us are captivated by brands and luxury items. The allure of the latest gadgets, designer clothes, and luxury cars is powerful, often driving us to spend beyond our means. Social pressure and the need to project a successful image can lead to financial strain, especially when fuelled by the ease of obtaining loans.

The Growing Trend of Loans in India

Loans in India are on the rise, particularly personal loans. However, the one type of loan that helps build assets — home loans — is increasing the least. This trend highlights our spending habits, showing a preference for immediate gratification over long-term financial stability.

The Trap of Instant Gratification

“Do not save what is left after spending; instead spend what is left after saving.” — Warren Buffett

The desire for instant gratification has only exacerbated this situation. We live in an era where buying now and paying later has become the norm. This mindset can lead to mounting debt and financial instability. It’s crucial to shift our focus from immediate desires to long-term financial health.

The Importance of Saving: The Time is Now

“The best time to plant a tree was 20 years ago. The second-best time is now.” — Chinese Proverb

Saving money is not just about preparing for the future; it’s about creating a safety net for unexpected events and opportunities. The right time to start saving is now. If you haven’t begun your financial planning yet, consider doing it this weekend — especially my mentees and Gen Z connections.

A Framework for Saving Money

Personally, I like to save money first and then spend. Here’s an equation I live by:

Income — Savings = Expenses

This approach ensures that you prioritise saving over spending. Let’s break it down further:

1. Set Your Top 2–3 Financial Goals:

• Emergency Fund: Save enough to cover 6–12 months of living expenses.
• Debt Repayment: Prioritise paying off high-interest debt.
• Investment: Start investing in stocks, mutual funds, or real estate.

2. Outline Actions for Each Goal:

• Emergency Fund: Set aside a fixed amount from your paycheck every month.
• Debt Repayment: Allocate extra funds towards clearing high-interest loans.
• Investment: Research and invest in diversified assets.

3. Set Tentative Timelines:

• Emergency Fund: Build within 12 months.
• Debt Repayment: Clear within 24 months.
• Investment: Begin immediately with a small amount and increase gradually.

The Power of Early Investment

Investing early allows you to take advantage of the compounding effect, where your earnings generate even more earnings over time. This can significantly grow your wealth and secure your financial future. Here are some basic ways to invest:

• Stocks: Invest in shares of companies to earn dividends and capital gains.
• Mutual Funds: Pool your money with other investors to buy a diversified portfolio of stocks and bonds.
• Real Estate: Purchase property to earn rental income and appreciate value over time.

The Compounding Effect

Albert Einstein reportedly called compound interest the “eighth wonder of the world.” It works like this: When you invest, you earn returns on your initial investment and on the returns that investment has already generated. Over time, this can lead to exponential growth in your wealth.

The Importance of Budgeting

Creating a budget helps you track your income and expenses, ensuring that you live within your means. Here’s a simple breakdown:

• Savings: 20–30% of your income.
• Necessities: 50–60% of your income.
• Discretionary Spending: 10–20% of your income.

Building Healthy Financial Habits

I was always in the “soft savings” mode but now I’m trying to be more conscious and move towards “small savings.” Many of my friends have been in FIRE mode. To each their own, but I still want to emphasise on having healthy financial habits, while it’s okay NOT to copy.

“Everyone has their own unique approach to saving; the key is finding what works best for you and sticking to it.”

Your Path to Financial Success

Recent conversations made me realize that with current inflation, our savings or retirement corpus must outpace inflation. Surround yourself with people who have dreams, desire, and ambition; they’ll help you push for and realize your own.

All it takes is determination and the right mindset to achieve the success that is already within your reach. Start today, stay disciplined, and watch your financial future transform.