Ways to Save Money
Saving money doesn’t have to be hard. We are telling you how you can save money by following these 10 steps and this will help you save a little bit more every month, which will lead to building a sizable corpus in the future.
The pandemic has shown us that it is important to save money as calamity can strike at any time. With inflation continuing to rise and taking the cost of living along with it, saving money has become more important than ever.
According to a recent EY report called EY Future Consumer Index for India, uncertainty around managing increasing living costs is driving more than 80% of Indians to save more money.
The report also said that 50% of all respondents of the survey have made it a goal already to save rather than spend.
Side Note: If you are someone who struggles to find the motivation to save money, we have written a detailed blog about how you can motivate yourself to save every month. Please read it here.
This shows how we are saving more and spending less to have a safe and secure future. This article will help you identify ways in which you can save money.
1. Distribute Your Salary
It is important to distribute your salary to different accounts. What does that mean? Try putting at least 15% of your salary in a savings account that is different from the account where your salary is credited.
This will prevent you from dipping into your savings. You can automate this process so that a certain portion will be automatically transferred every month.
For instance, you choose to invest in mutual funds via SIPs as it will invest a certain amount automatically in the scheme every month.
2. Track Your Spending
This advice will never get old, no matter how many times we say it. Tracking your spending will help you understand how you spend your money every month and whether you have any bad money habits.
It will help you understand more about where you spend the most money and how you can rectify your money mistakes if you have any.
This will also help you in preparing a better budget every month and sticking to it without any difficulty.
3. Separate wants from needs
It is surprising to know that many adults do not know the difference between wants and needs. Eating food every day is a need but eating out every other day in a fancy restaurant is a want.
Although there is nothing wrong with eating at a fancy restaurant once in a while, it will burn a huge hole in your monthly budget if you do it often.
4. Delay Purchases
We are all humans and emotions take over us a lot more times than we would like to admit. So, there will be times when we would want to buy something out on a whim.
Here’s a hack if you struggle with stopping yourself from making impulsive purchases – Wait for 30 days. Whenever you see something that you want to buy, add the item to your cart, take a deep breath and wait for 30 days.
Chances are you wouldn’t want to buy it after 30 days.
5. Plan Your Major Purchases
You can save a lot of money by planning the purchase of cars, furniture, appliances, electronics, and more. Plan to buy these products during sale periods so that you can buy them at cheap prices.
If you are shopping in person, make sure you get the best deals by shopping in wholesale places and visiting a couple of stores so that you can get the best prices.
6. Cancel Unnecessary Subscriptions
When you sign up for any service or subscription, there is an auto-renew option, which means that your plan will automatically renew every month. Sometimes, we would sign up for some service but we might not be using it as frequently as we wanted to.
There are times when you must have given your card details while signing up for a free trial but you must have forgotten to remove your card details when the trial period is over.
Hence, you must have been paying for the service without realizing it. Hence, it is a good idea to review your bank statements once a month to see what kind of subscriptions you have.
If you are not using a service or subscription, you can cancel them to save money.
7. Reuse Stuff As Much As Possible
We get it. It is easy to throw away things and buy new ones. In this day and age, when you order stuff, it will be delivered to your house in 2 days.
Hence, we put convenience over everything else. However, it is a good idea to reuse things as much as possible. When something is broken, try fixing it before throwing it away forever.
You can also try investing in good quality products so that they last longer. For instance, try buying good quality electronics so that you don’t end up buying a new earphone every 3 months.
Reusing the things you own is good for your pocket and for the environment.
8. Try ‘No Spend’ Days
Pick a day or even a week where you go without shopping for anything other than your essentials.
Whatever your guilty pleasure is, you will not be spending even a single rupee on them during these days. This will help you control your spending on impulse purchases.
9. Set Savings Goals
When you have a goal in mind, you will do your best to achieve it. Make sure the goal is specific, not arbitrary.
Your goals should sound like, “I will save ₹1 lakh in my emergency fund account this year” or “I will save ₹40,000 for my short-term goals in the next 6 months.” Once you set your goals, create a plan on how you can achieve them.
When you have clear savings goals, you will be able to push yourself to save more money each month.
10. Put Your Savings In A High-Interest Account
It is important to save your hard-earned money in a place, which gives higher returns for your money.
Instead of putting your money in a bank savings account, you can consider investing in Smart Deposits, as they offer higher returns than a bank account.
You can redeem your money whenever you want and there will be no penalty charged.
In The End…
There are many ways to save money and grow your wealth. We have to use them in our day-to-day lives to become better at managing money and saving for our goals.
We hope this article will help you understand more about how you can save money every month.
If you would like to become a Super Saver (someone who saves 15% of their monthly income and is extremely smart at managing their finances), head over to Koshex and create an account with us today!