Finance and money occupy significant aspects of life. So it makes sense to become as well-informed as one can be to save money. This will help you in making better financial choices and you will be better off in dealing with monetary issues.
Every month we all feel the pinch for more money as the month progresses. You always wished how much you can accomplish with more money. I usually spent & saved the same percentage when I made Rs. 10K and it was almost same when I made Rs.50k.
It was only later on that my savings percentage went up. Only the financially prudent can save more and keep expenditure constant all times. It took me a while to realize that. Join our club and start your journey early there along with us. ITS NEVER TOO LATE!
If you want to get the money situation under your control you can follow these money saving tips and tricks outlined in this article. This will help you to create a more realistic budget that will reflect your actual earnings and income. One must ensure that the amount of cash going out should never exceed the amount of cash getting in.
Here is a list of things one can do to ensure that the money situation is always under control. We will keep adding to the money saving tips list as we get more…Here they are…
Money Saving Tips
1) Focus on savings
Everyone needs some help to stay within the budget and you are no exception. First determine the amount of money that you to save every month. Get it deposited directly to your savings account or to any mutual fund that you may have.
You can keep your savings anywhere but make sure to put money in it every month. These savings will make a huge difference in your life later on. It is always wise to save money for yourself before starting to spend.
If you leave savings to last, you’ll never do it. I always make it a point to pay my mutual funds, stock investments, EMI before 7th of every month. That leaves us lesser money towards end of the month for unnecessary expenses.
2) Use cash only
You should take out enough cash that will last you for at least one whole week. Just make a mental calculation of the things that you need for the week and then take out cash from the bank accordingly.
It will be very easy for you to turn down an expensive pair of shoes when you know that you have only limited cash to last through the week. Also when you pay with cash it is hard to part with it rather than using plastic to swipe.
Try this! Instead of paying Rs.5000 with credit card, try to count the money and pay with cash. I have always experienced it is a bit tough to pay with cash as it creates a psychological barrier.
3) Reduce bad habits
If you are a heavy user of alcohol or tobacco then you probably know how these two can deplete your financial resources in no time.
Simply stop/reduce smoking and drinking and channelize these expenses towards meaningful or household purchases. You will also save on health care expenses and become eligible for lower premium category in health insurance.
If you smoke 2 cigarettes a day (Rs.20) and booze twice a week, you approximately spend minimum Rs.300 a week. That is nearly Rs.1200 a month. If you save that in a SIP for 20 years at 8% p.a, guess how much you’ll end up with. You will get Rs. 6,84,178/– at end of 20 years.
4) Discus and share the responsibility
You should not be the only member in your family who is concerned with the budget. If you are striving hard to save money but your wife is spending as if there is no tomorrow then the whole purpose gets defeated. Sit down together and determine how much should each of you spend.
Check every week the progress of each individual regarding the saving part. In a nutshell, it is not the responsibility of one person in a family to keep the money situation under full control.
5) Get rid of the debts especially high interest debts
If you have personal loan or credit card debt then now is the time to get rid of these one by one. Choose one card (highest interest rate) and pay as much as you can on a monthly basis.
If you have other credit cards, then pay the minimum amount due on each of these till you pay off the outstanding amount on the first card. This will help you boost your credit rating score.
Also all debts from financial institutions are structured in such a way that maximum interest is paid in initial stages and a penalty when paid earlier. A better approach would be to avoid them or choose a product that has no pre-closure charges.
6) Track all receipts
You need to monitor your expenses for several weeks in order to arrive at a budget. So you need to keep track of all your expenses so that you stick to the budget easily.
Do not lose any of your receipts and write down the places where you have spent money. You are less likely to overspend when you are aware of the amount of money already spent.
Reflecting on your expenses will point to unnecessary expenses you make. It will help to identify how much you spend on what. You can then decide if it is necessary or wasteful, one time or recurring.
7) Balance the check book
Many people do not balance their check books on a regular basis. If you are one of them then you must kick start this habit as soon as possible.
If you are on a really tight budget then a number of small mistakes can lead to insufficient funds in your account or overdraft charges. Every time you get a bank statement, you must balance it up so that your ledger stays in good shape.
8) Analyze your spending pattern
Look through all your receipts and the budget. Always look for expenses that can be easily cut. Maybe you can start bringing your lunch to work more frequently or you can join a carpool or use public transport to come to office. I know they can be like hell in some parts of India.
You will be surprised to know that just by cutting your restaurant and gas expenses you can save an incredible amount of money. I spend nearly Rs.16,000 per month on restaurant, outstation travel expenses alone and looking to reduce them.
9) Set up special accounts
If you ever find that you need to reach out to your savings very frequently then you might consider setting up another account which has withdrawal penalties.
Banks and other financial institutions always pay a higher rate of interest if you agree to let them use your bank account for a longer period of time. When you put all your savings in a yearly current deposit account, you will earn a lot more.
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10) Have a list for shopping
This is probably the hardest money saving tip I can give and follow at same time. How many times have we just gone for window shopping and end up spending money.
Before you go out for shopping, ready a list and try to stick to them. There are a lot of things in my house (and I bet the same for you) that we just bought out of impulse but seldom use. Having a list is a good way to prevent this. Send me a note if you manage to keep up shopping with the list. It is really hard to stick to it 🙂 .
11) Shop Online to save money
With the advent of Internet and e-commerce, you can save a lot nowadays. I just bought a pair of Nike shoes for Rs. 2000. Only to hear that my friend bought a similar pair on Jabong.com for nearly half the price last week. So much for me to give YOU money saving tips.
You get great deal of discounts on the internet nowadays. Browse for sometime and you can find a deal some where. Why? Because online retailers do not have the store costs, salesman costs involved. They have a warehouse and buy wholesale and can sell at a discount compared to the store.
12) Use coupons whenever possible
You can save money online, if you know where to look. Before you book a movie ticket or bus ticket or flight check for some deals/coupons. I use them regularly nowadays. Even if you can get a 5% discount it still saves you money.
13) Re-structure your salary
This is one of the under-used money saving tips. Indian tax system is so flawed that hard earning salaried persons are taxed more. If your company allows, ask for salary re-structuring. This is a process where your CTC remains same. But your expenses are paid for before net-income is calculated.
For eg., after your 80C,80D deductions rather than own your car you can ask for your company to pay for your driver, car before your salary is paid. A car is anyway useless after few years. Why should you own a depreciating asset?. You can also use meal coupons, grocery card that some companies provide.
Must Read: Is it better to own or rent a car in India?
14) Exercise, be-happy and get healthy
“What? Have you gone mad? How is it related to saving money?”. I know this is your exact thought now. But with healthcare costs shooting through the roof, this is probably the top/best of money saving tips I can give you. Do you have any idea how much money you will spend due to being unhealthy, overweight, diabetic or with high Blood pressure.
Also remember how much these cost you in terms of doctor visits, medicine bills and hospital bills whenever you’re sick. Truly, if you & your family follow this one tip you can save as much money as all above tips combined. Above all, being happy is the ultimate reason why we need money. If you’re already happy, then you’ll automatically need lesser money. Am I beginning to sound like a false Yogi? 🙂
15) Be more flexible in your approach
Although you have prepared a budget and are trying very hard to keep the money situation under control, there is no denying the fact that you must be flexible in your approach. When you make a budget keep aside some amount of money to meet those variable expenses.
If you cross the budget once or twice, be gentle on yourself and do not panic in these situations. If you get easily frustrated then you will find it very difficult to get your life back on track.
The budget must be updated regularly and always have control over your spending as it is your hard earned money. When you keep a budget and maintain it, your life will run smoothly and you can maintain a sound financial status with less effort.
Following the above-mentioned money saving tips can help a couple maintain control over the financial situation in the household. You can ready yourself for a big purchase and you do not need to borrow unnecessarily.
Comment and let us know if you liked these money saving tips. Remember, money saved is money earned. Also feel free to add some more really useful tips with your e-mail mentioned. If we think it is really cool and useful, we will send you a FREE e-book worth $5 as gift.