This blog will show you simple ways to save money.
Miss Spending: Hey, how are you?
Miss Saving: Well I am fine. How about you? You seem quite tense.
Miss Spending: Well I am not able to meet my expenses and pay bills. Seems that no money is left at the end of the month. How much do you save in a month?
Miss Saving: Why are you not able to save? We both have the same salary. Out of Rs 10000, I save Rs 3000 every month.
Miss Spending: What! How is that even Possible?
The conversation between two young ladies is quite familiar to all of us. We all have had this kind of conversation with our friends.
If you are still reading this article then probably you are the kind of Miss Spending. There is nothing bad about that. It is more important to accept this state. With Acceptance comes understanding and with understanding comes the solution.
What is saving Money?
It is a Habit.
It is putting aside a certain portion of your salary for future use. Saving gives us a sense of protection that we will be safe even on rainy days. In India Context, your financial condition will surely depend on your family conditions. – Tweet This
So savings is truly a family approach.
Simple Ways to Save Money.
Emergency Fund.
Just in case you lose your job and there is no source of income. Or you are medically unfit to work for some months. Then there will be no source of income. How do you plan to cover those days?
The answer is Emergency Fund. It is a total of 6 times your monthly expenditure.
Suppose the Total Expenditure in a month is
| EXPENSE | COST |
| Grocery | Rs 3000 |
| Electricity Bill | Rs 1000 |
| Transportation Bill | Rs 1000 |
| EMI | Rs 2500 |
| Studies | Rs 4000 |
| Home items | Rs 3000 |
| Total | Rs 14500 |
This is a monthly expenditure that can’t be avoided. The Emergency Fund comes out to be 6 times Rs 14500. It is Rs 87000. By rounding off, it comes out to be Rs 90000.
So this is the first step towards savings. This money is to be easily accessible. It can be saved in a bank account.
Budget.
In India’s rural areas, budgeting is not given much importance. For a family or an individual to be financially stable it is very important to make and follow a budget.
It helps you track your spending habits. A budget should be made in categories. Over a period of time, we can make out where can we still save money. Where is money coming from and where is it going needs to be tracked. This old-fashioned method will prove to be very beneficial in long term.
Formula: Income – Savings = Expenditure and not that Income – Expenditure = Savings.
Curb the Impulse.
There are times when we feel so strongly to buy a good gadget or those new jeans or watch that latest movie. It’s hard to curb this feeling. The best way is to let 24 hours pass and then think whether it is really needed or not. After 24 hours again think about it and take that decision. If you still feel that it is a want and not a need then go ahead.
Tax Yourself – Simple Ways to Save Money.
It is a very effective method to inculcate the habit of thinking before spending. It goes like this. Every time spend on any of the things that come under wants and not under needs, you deposit the same amount in savings. That deposit has to be before that spending. It has to be in an account from where you cannot take money out before a certain time. This will make sure that you think twice before spending and will eventually increase your savings.
No Loan or Credits.
To take things on loan or on credit is a bad psychology than a bad habit. It is spending the money before you have it. We must buy anything if we have that scope. If not then plan your way around.
Plan your Gifts.
There will be occasions when you will be required to give gifts. These expenses are over and above your budget. So plan them in advance. Set aside a monthly amount for them.
It will be a day in the week when there will be no spending come what may. Though it is effective in a very minor way, it will help inculcate the habit of thinking before spending.
Avoid Eating Out.
We should have home food only. Carry your tiffin when going out for some work. Food cooked at home is healthy and is less expensive also.
Use Public Transport.
Using public transport will save a lot of money. Even if you have a car or a motorcycle. Use your personal vehicles only in cases of specific requirements.
Use Coupons.
When buying online or eating out, use cash coupons. Similarly, you can ask for cashback and discount. There is no shame in asking for the same.
Recommendations
Medhini says that money grows only when you give it time. So we need to have patience. Money is the power that we need to live comfortably. Start saving today. It will be hard but it will be worth it. One must learn the difference between Rich and Poor. Understand the psychology behind both the cases and then start the journey of saving.