How to Save Money
Money saved is money earned. Yet most of us fail miserably when it comes to actually saving despite the intent to do so. You may have a lucrative career with a high paying salary, but it will not be helpful in the long run if you don’t save. We often find ourselves struggling to pay monthly phone and credit card bills, rent, school fees, household expenditure while sales, discounts, easy credit and debts dominate our spending. Saving is more of a mindset that you must develop for accomplishment of various life goals knowing that it is never too late to begin. If you feel you are not doing enough to save, start with a few easy steps to lay the foundation for a better tomorrow.
Create a Budget
This really sounds boring, but perhaps is the most important step that you can take towards saving. Make a list of all your monthly expenses and expenses. You need not be a professional for that, just use Money View for help. This exercise helps you assess the inflow and outflow of funds and create a budget accordingly and also keep track of it every month.
Save Before You Spend
‘Pay yourself first’ is a popular mantra that has helped millions realize their financial goals. Implementing this technique simply requires deciding an amount that you wish to save and considering this as another bill that needs to be paid at the beginning of each month. You can set up automated deductions with ECS mandates so that you don’t miss out any month. Instead of Income – Expenses = Savings try making it Income – Savings = Expenses. You can start by segregating your fixed, variable expenses and savings. Right from bill payments, savings, rent, debt repayment (EMIs), SIPs, recurring deposits, etc. that can all be taken care of by setting up ECS mandates. This lets you automate important expenses and ensure that they are paid out no matter what. This allows you to manage your expenses more efficiently as you know how much you are left with.
Plan Your Shopping Sprees
Shopping is an irresistible urge that we often give in to. But if you plan your shopping, you can actually save. Shopping on specific days, looking for mid-week deals on groceries, not falling into the ‘Buy 2 Get 1 FREE’ trap and other offer deals, making a list of all that you really need and not mindlessly adding an item to your shopping cart and curbing shopping impulses by putting off the purchase by a few days are a few practices that help you shop wisely. If you shop online look for free shipping, payment through e-wallets, special offers, etc. you spend less and get more.
Manage Credit Card Usage
Paying credit card bills are a huge drain on our resources. It is virtually impossible not to use credit cards, but you can get money-wise by managing them. Look for cashbacks on your credit cards, categorize them by assigning each for different heads like groceries, food and entertainment, online shopping and repay on time. Ditch your cards for cash for some expenses, if necessary, because parting with real time money creates more awareness about spending.
No Amount is Too Small to Save
You can start saving with something as low as Rs. 500 a week or even lesser! We often end up justifying ourselves with the thought, “What difference does spending an extra Rs. 50 or 100 make?” But here is where we go wrong. So next time you are tempted to buy an extra pair of shoes or that dress, think again.
Cooking at home on weekends, comparing prices before buying, opting for pre-paid mobile plans and going for movie offers especially on weekdays are a few more ways you can control expenses. Making these small yet significant lifestyle changes will help you gain control over your finances and reward you with a higher balance in your account.
Gautami Sen is an MBA having majored in finance. However, she now fuels the creativity in her through various passionate pursuits like writing, painting and honing her culinary skills.