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How to build a financial cushion? – Money Tricks: Lesson 8

by Money Puzzle   ·  November 18, 2021   ·  

When it comes to money, it’s not just the investment products that matter. Your understanding, awareness and behaviour is of primary importance.

To build a financial cushion, you need just these three things

1. Save, save, save

There is no substitute for adequate savings done right from the beginning. It’s never too late to start and try to put aside at least 1/4th of your income as savings every month.

2. Sustainable lifestyle

This means that you don’t need to bump up expenses with every pay hike. No need to go for a higher rental/EMI, a bigger car or higher spends on entertainment with each salary hike. A sustainable lifestyle will be comfortable, allow for indulges but at the same time have room for status quo through salary hikes which can then be used towards bumping up your savings.

3. In investing focus on safety and growth

Investing in safe assets is important for some goals, but in the long run focusing on growth or wealth creation is what can get you across the line. If you are too risk averse, you may lose out on calculated risks needed for growing your wealth. And you have to focus on wealth creation for your future financial security.

Also read:

  • How will bank fixed deposits help me? − Money Essentials #9

    How will bank fixed deposits help me? − Money Essentials #9

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  • Should I take a personal loan? − Money Essentials #7

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  • Do I need to buy insurance? − Money Essentials #6

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    Have you heard someone say, you must get insurance done? Have you heard others say that insurance is useless and unnecessary, just buy equity stocks instead?


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