Saving money is not easy. As youngsters, we are always tempted to buy things which we need as well as we don’t need. Buying a nice pair of earphones because it looks good, checking out the new restaurant that opened in your locality, a weekend getaway, we are never short of reasons to spend money. In the end, we exhaust our accounts and there is nothing left for us. This also gives rise to some bad habits, and despite earning well, we might end up being short on cash.
You work hard, pay your bills, and you need money to fulfill your needs. However, it is important that you save money for you never know when you can meet with an emergency and having shortage of cash during that point time will not be an option for you. So, how can you start saving? We discuss further.
- Do not spend unnecessarily: For starters, the best way to save is to stop spending unnecessarily. When you receive your salary, you pay your bills and the rest you spend on things which you may not require. Before you purchase anything, always ask yourself a question i.e. do you really need it? In case you purchase it, will it affect your budget? Will you be able to go through the rest of the month? If you get answers to it, you can then decide whether you really need to buy the item or not.
- Have a sleeping account: It is recommend for people to have an extra bank account, or what one can call a sleeping account. It is called a sleeping because, once you receive your salary, you put a certain amount of money into the sleeping account and do not touch it until and unless you absolutely need it. This does two things. First, in case your salary account gets exhausted, you do not have to worry as you have a backup account which you can use to help you get through the month. If you do not end up using the money from your sleeping account, the money remains and as you keep adding, you have more money for your future needs. It is important that you always put a set amount of money into your sleeping account. For example, you can always put close to Rs.5,000 every month, which will ultimately helps you not only during the time when you are short of cash, but it will also help you in purchasing a new mobile phone or laptop for yourself. You will be able to purchase these gadgets even when your salary account may get depleted, but you won’t have to ask anyone for extra money in order to buy anything you would like to purchase for yourself.
- Use your credit cards properly: You may personally detest credit cards for one simple reason that people tend to inculcate bad habits and spend lavishly. Over a period of time, you will realise that credit cards can be very helpful but only if you use it wisely. Having a credit card may tempt you to use it every time you purchase something for yourself. Hence, not only must you choose a proper credit card and ensure that there are no hidden charges, but also use it only when it is highly required. You must surely know your credit limit, and it is always good that you use it during times when there are reward points involved. For example, a friend of mine would use his credit card in order to book his flight tickets which would give him reward points. He would ultimately avail those points when he was buying groceries or eating outside. Another friend of mine used his reward points to get discounts on his movie tickets. You can easily see that not only were they having fun but they managed to get discounts because they choose to use their credit card in a systematic manner. Use cash or your debit card where you can as it helps you keep an idea regarding your budget and how much you need to spend in order to save some sizeable amount of money.
- Find ways to fill your time: It is during the weekends when you tend to spend a lot. You tend to hit the pub, check out the new restaurant, or watch the latest movie at IMAX. Unknowingly, because of these habits, you could spend an average of Rs.5,000 on a day and close to Rs.10,000 during your weekends. You need to ask yourself why do you require to go out every weekend. Your Saturdays and Sundays are a great time to do activities that you otherwise do not get time to work on since you are busy with your job. Do activities like reading, watch a movie at home, and start learning to cook, etc. Not only will you learn something new, but you will realise that you are spending less as compared to what you would spend during your visit to pubs and restaurants. It is never bad to go and meet your friends over a drink, but not if it is costing you a great amount of money and not allowing you to save.
- Have a financial goal: Having a financial goal is a brilliant way to start saving money. Want a new house?, start saving. Want to buy a car you saw the other day?, start saving. Want a new mobile phone because the old one is giving you trouble?, it is time you start saving your money. In simple words, having a financial goal provides you with that discipline in order to not spend your money on things that you don’t need. You can start with a short-term goal and accordingly have some amount of money kept aside on a regular basis. Once you are able to achieve your short-term goals, you can then move on to your long-term goals such as buying a new house, etc and accordingly start saving for it.
- Start investing: One of the best ways to save money is to invest it. If you have long-term goals that you want to achieve, investing your money in proper instruments is the way to go forward. Investing not only helps you in saving, but also maximises your savings. You will have to figure out which instruments are suitable for you for there are high risk and low-risk tools in which you can pool your money. You can start by opening a recurring deposit account and put a certain amount of money every month. You can also invest in mutual funds via SIP and invest as little as Rs.1,000 per month and ultimately get returns on it. If you don’t want to take too many risks, you can invest in postal schemes, PPF, etc. and see your money grow. However, it is important that you properly research before investing.
You must understand that your money is important and it is important that you use it wisely. In today’s time, savings can help you take care of your various needs, goals, and future requirements. Following the above-mentioned methods can help you save and ultimately take care of your future goals.
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