If you find it hard to save, there are some simple ways to help you do so
ONE OF the quickest ways to improve your finances is to reduce your expenses and find more ways to save money. However, in this age of soaring prices amid rising household expenditures and galloping human aspirations, it is becoming increasingly difficult for the common man to sustain a living and also save more for a secure financial future.
Particularly since the onset of the economic meltdown, a growing number of people have been resorting to various ways to curb spending, save more and boost their income, such as cutting food costs, doing household chores on their own, enhancing skills, starting a parallel business and even driving less, among others. However, there are still many people around who find it difficult to save for various reasons, most of the times putting the blame on their 'insufficient' income. But this is simply an excuse as various studies have already proved that how much you save has little to do with how much you make.
But if you are one of those who think they have exhausted all avenues for saving a buck, you can still try these innovative and sure-shot ways which can help you save more and also increase your cash flow in line with your goals.
The best way to save more perhaps is 'paying yourself first', a phrase originally coined by George S Clason in his book Richest Man in Babylon. Although many of us might have heard of it, only a few actually do it. For those who are still not aware of this concept, paying yourself first means the first bill you pay each month should be to yourself, simply because you have worked for it and deserve it the most. Thus, before you pay your monthly bills, before you buy groceries, before you do anything else, set aside a portion of your paycheck or income to save—say, 5 percent or 10 percent, or whatever you decide. As we say, one have to save 30% of their income. Then deposit the amount into a savings account before paying your monthly bills. A great way to do this is to set up a savings, investment or retirement account that will directly route it from your salary account every month.
Financial experts say if you spend money and save what's left, you will have little left to save. But if you first save money and then spend what's left, you have no difficulty meeting your financial needs even with the smaller amount of money. In fact, this habit, if developed early, can help you build tremendous wealth.
Another radical way to save money is sticking to the monthly budget and resorting to forced savings. Like the former, this system also works, regardless of the kind of job you have or your income. Giving an example, segregates her monthly expenses in envelopes, for example, for groceries, eating out, fuel costs for two wheelers, etc. If the family decides to go out at the end of the month, the venue is dependent on what amount is left in the 'eating out' envelope. Similarly, the children may resort to travelling by bus if the 'fuel costs' have run out. This way they are able to budget their expenses and save as per their goals.
Similarly, one of the best ways to help with saving money and keeping a quality budget is 'spending freezes'. You can, for instance, take a 'no buy' day or week. This means for the entire time of the 'no buy' break, you aren't allowed to buy anything new or to go shopping. Exceptions to the 'no buy' time might include paying for medicines, food, and emergencies that come up like a car breaking down. Save the money you would have normally spent during the day or week and invest it by the end of the month.
Thus, it is important to ensure some forced savings by way of systematic investment plans, so the temptation to spend a big chunk of your salary at the start of the month is reduced.
You should also try your best to avoid impulsive spending, which is a very serious problem for many people. The urge to spend frivolously is massive, especially in today's society, fuelled by the growth and popularity of plastic money. Some people, who struggle with this issue, even characterise their shopping habits as an addiction that is slowly driving them into serious debt. Therefore, learning how to avoid impulse spending can be a great way to significantly increase your savings. Although the ability to resist impulse spending takes a lot of time, practice and patience, one of the easiest ways to do it is making an effort to have a moment of reflection before buying anything. For instance, If you see something you would like to buy, try waiting a day before actually committing yourself to buying. If you really want it, you will come back. If not, you will never. This also gives you the chance to find other things that may be better.
There are many other ways which may look of little value but can surely help you save big bucks over time. For instance, you can cut out junk food from your diet, as it is expensive and eliminating it can save a lot of money. Similarly, if you are a smoker and are looking to quit, then you should keep aside the money for every cigarette that you do not smoke. If one cigarette costs 5, then keep aside 10 as a reward for not smoking. If you usually smoke a pack a day, then you would effectively set aside 6,000 a month if you successfully manage to quit smoking completely. You will feel really good about yourself when you see the amount that you have saved by not smoking.
You can also end up with a substantial chunk of extra cash every month just by paying your bills, particularly credit card bills, on time. To take an example, if you have six credits cards and you are delaying their payments, then you may have to fork out close to 5,000 every month in late fees alone. However, if you save 5,000 every month and invest it in an absolutely safe instrument, which gives 8% return compounded annually, you will amass over 1 crore in just 35 years.
But while doing all this, it is also important not to keep your money idle or park all your savings in just bank savings accounts. It is, in fact, no secret that savings accounts have a fairly low interest rate. You can, therefore, use sweep accounts or take money beyond what is your 'target' minimum to fixed deposits or investments. Compare bank interest rates on fixed deposits and recurring deposits and get the best deal for your money.
Thus, if you have the willingness, curbing your spending and saving more for a secure future can't be a distant dream!
SAVE FOR...
1 Save money on transportation
2 Don't waste electricity & pay more
3 Look for bargain deals & discounts
4 Get your mortgage costs down
5 Bring your lunch to work
6 Lower your phone & utility bills
7 Watch movies at home
8 Exercise at home
9 Restrict usage of plastic money
10 Recycle all items that can be recycled
~
Source :prajnacapital
ONE OF the quickest ways to improve your finances is to reduce your expenses and find more ways to save money. However, in this age of soaring prices amid rising household expenditures and galloping human aspirations, it is becoming increasingly difficult for the common man to sustain a living and also save more for a secure financial future.
Particularly since the onset of the economic meltdown, a growing number of people have been resorting to various ways to curb spending, save more and boost their income, such as cutting food costs, doing household chores on their own, enhancing skills, starting a parallel business and even driving less, among others. However, there are still many people around who find it difficult to save for various reasons, most of the times putting the blame on their 'insufficient' income. But this is simply an excuse as various studies have already proved that how much you save has little to do with how much you make.
But if you are one of those who think they have exhausted all avenues for saving a buck, you can still try these innovative and sure-shot ways which can help you save more and also increase your cash flow in line with your goals.
The best way to save more perhaps is 'paying yourself first', a phrase originally coined by George S Clason in his book Richest Man in Babylon. Although many of us might have heard of it, only a few actually do it. For those who are still not aware of this concept, paying yourself first means the first bill you pay each month should be to yourself, simply because you have worked for it and deserve it the most. Thus, before you pay your monthly bills, before you buy groceries, before you do anything else, set aside a portion of your paycheck or income to save—say, 5 percent or 10 percent, or whatever you decide. As we say, one have to save 30% of their income. Then deposit the amount into a savings account before paying your monthly bills. A great way to do this is to set up a savings, investment or retirement account that will directly route it from your salary account every month.
Financial experts say if you spend money and save what's left, you will have little left to save. But if you first save money and then spend what's left, you have no difficulty meeting your financial needs even with the smaller amount of money. In fact, this habit, if developed early, can help you build tremendous wealth.
Another radical way to save money is sticking to the monthly budget and resorting to forced savings. Like the former, this system also works, regardless of the kind of job you have or your income. Giving an example, segregates her monthly expenses in envelopes, for example, for groceries, eating out, fuel costs for two wheelers, etc. If the family decides to go out at the end of the month, the venue is dependent on what amount is left in the 'eating out' envelope. Similarly, the children may resort to travelling by bus if the 'fuel costs' have run out. This way they are able to budget their expenses and save as per their goals.
Similarly, one of the best ways to help with saving money and keeping a quality budget is 'spending freezes'. You can, for instance, take a 'no buy' day or week. This means for the entire time of the 'no buy' break, you aren't allowed to buy anything new or to go shopping. Exceptions to the 'no buy' time might include paying for medicines, food, and emergencies that come up like a car breaking down. Save the money you would have normally spent during the day or week and invest it by the end of the month.
Thus, it is important to ensure some forced savings by way of systematic investment plans, so the temptation to spend a big chunk of your salary at the start of the month is reduced.
You should also try your best to avoid impulsive spending, which is a very serious problem for many people. The urge to spend frivolously is massive, especially in today's society, fuelled by the growth and popularity of plastic money. Some people, who struggle with this issue, even characterise their shopping habits as an addiction that is slowly driving them into serious debt. Therefore, learning how to avoid impulse spending can be a great way to significantly increase your savings. Although the ability to resist impulse spending takes a lot of time, practice and patience, one of the easiest ways to do it is making an effort to have a moment of reflection before buying anything. For instance, If you see something you would like to buy, try waiting a day before actually committing yourself to buying. If you really want it, you will come back. If not, you will never. This also gives you the chance to find other things that may be better.
There are many other ways which may look of little value but can surely help you save big bucks over time. For instance, you can cut out junk food from your diet, as it is expensive and eliminating it can save a lot of money. Similarly, if you are a smoker and are looking to quit, then you should keep aside the money for every cigarette that you do not smoke. If one cigarette costs 5, then keep aside 10 as a reward for not smoking. If you usually smoke a pack a day, then you would effectively set aside 6,000 a month if you successfully manage to quit smoking completely. You will feel really good about yourself when you see the amount that you have saved by not smoking.
You can also end up with a substantial chunk of extra cash every month just by paying your bills, particularly credit card bills, on time. To take an example, if you have six credits cards and you are delaying their payments, then you may have to fork out close to 5,000 every month in late fees alone. However, if you save 5,000 every month and invest it in an absolutely safe instrument, which gives 8% return compounded annually, you will amass over 1 crore in just 35 years.
But while doing all this, it is also important not to keep your money idle or park all your savings in just bank savings accounts. It is, in fact, no secret that savings accounts have a fairly low interest rate. You can, therefore, use sweep accounts or take money beyond what is your 'target' minimum to fixed deposits or investments. Compare bank interest rates on fixed deposits and recurring deposits and get the best deal for your money.
Thus, if you have the willingness, curbing your spending and saving more for a secure future can't be a distant dream!
SAVE FOR...
1 Save money on transportation
2 Don't waste electricity & pay more
3 Look for bargain deals & discounts
4 Get your mortgage costs down
5 Bring your lunch to work
6 Lower your phone & utility bills
7 Watch movies at home
8 Exercise at home
9 Restrict usage of plastic money
10 Recycle all items that can be recycled
~
Source :prajnacapital
