How to save money is a worldwide concern? It starts with our mindset. It means we have to prioritize or arrange our financial goals. We all want to save. Early saving, as well as maximum saving, will make sense. As a result, our life will be much better.
How to Save Money:
To begin with, our future needs should be given priority over our current wants. This guide can help you a lot in this regard.
We can save money easily, if we follow the following principals
- At first, we have to seriously set a monthly budget.
- Secondly, we should learn some daily money savings tips.
- Thirdly, we need to know monthly money savings tips.
- Further, we need to follow some long term money savings tips.
- Finally, we will look for some additional resources.
In fact, we need to set a lifetime financial goal. It, in turn, will help us to decide how to save money. First, we will start depositing a part of our income in a savings account or a retirement account or anywhere else. Pay off all the previous debt at the earliest and will not make any further loan.
Most importantly, we should set a realistic timeframe for all goals and start savings accordingly. We will make a budget and keep a record of all our expenditures.
Besides, we will spend only on the essentials and if available look for cheaper options. It may be daily food and transport fare and energy usage.
Above all, we will save for an emergency fund and spend money occasionally and judicially on luxuries. To do all these, we need to know the factual reasons to save money.
How to save money sensibly/responsibly we will try to follow the followings as much as we can.
1.First Pay to self:
In the first place, it means an amount that we cannot get a chance to spend from every monthly payout. It is the easiest way of how to save money. Generally, our office deducts a certain amount from our salary and save it. These are salary savings schemes. Some small companies also provide this benefit, if most of the employees agree with it. A number of companies directly deduct from the savings account.
Usually, it is our
- provident fund
- group insurance
- postal life insurance
- life insurance policies
- health insurance
- mutual funds and etc.
The office will deduct the amount as per our concern. Usually, these are long-term savings. Normally, these savings aim towards our retirement or to meet some lump-sum expenditures. They include children’s higher education or marriage or treatment. It may also be a purchase of land or flat as well as addition or alteration of the dwelling house. (We may also take help of our love and relationship to fulfil them).
If our office does not provide this facility or job nature cannot provide this, then we will deposit a certain amount directly to our savings account. From here, we will pay for the above-mentioned deposit or deposits by cheque or cash. We may also use various apps or debit cards for payment.
2.Set Reasonable Savings targets or goals:
Most importantly, it is the best and easiest way to create various savings goals according to your income at the very early stage of your career and save it continuously. To know more read the importance of savings.
It will be easier for us to save if we know why we are saving for. At the same time, we also know how much to save. Additionally, the end benefit is clear to us. For this, we need to set our goals at first. Then we will be able to save according to our financial goals.
3.Maintain a Budget:
Another important step towards how to save money is to maintain a written budget at the beginning of every month. We have some fixed expenditure per month. It may be house rent, travelling expenses, daily food item marketing and glossary, children’s education, salary of house servant, electric bill, phone and TV recharge bill, internet bill, entertainment, monthly necessary savings etc.
We will seriously start our monthly budget following 50/30/20 principle. It means we will spend 50% of our income on necessity items. We will allot 30% of our income towards fulfilling various wants. If we want, then we can easily save something from here. We must save at least 20% of our savings without any fail.
4.Start saving as early as possible:
Our savings will increase due to interest accrued to it. Using the power of accumulated interest also favours how to save money very well. Therefore, the longer our money remains in various savings, the more interest it will earn. Due to this, we will try to save as early as possible and let it grow with time. We will also know how to grow our savings. We will remember one thing that basically we need more time to grow our savings. This is the power of compound interest.
5.Create a Retirement Account:
In a young age, it may seem very irrelevant. But, we will create a retirement account as early as possible from our younger age. Then we will get a long span of time. It is a wonderful way of how to save money.
Even if, we are able to save only rupees 1000 per month for a span of 35 years in a good mutual fund, it will easily give us over 1ceore of rupees and it is a huge amount for a general people with a meagre income. Actually, this is not very tuff. We only need our proper goal. Our long term big goals such as retirement fund will take a prolonged time to accomplish. At the same time, we will take into consideration that the financial market will change by that time. Therefore, we have to set such goals very cautiously.
Most importantly, we will diversify our savings. It is a very good strategy for how to save money. It means we will open a savings account, save in the bank, post office, bonds, life insurance policies, child life insurance plan (it is an ideal role of parents) when necessary, health insurance, mutual funds etc.
Moreover, we will try to take a number of policies. For instance, we have decided to save rupees, 1000 in recurring. Then save rupees 500 in bank and rupees 500 in the post office.
Otherwise, we may take two recurring policies of rupees 500 each in the bank or post office.
It will help us to continue our savings.
7. Avoid taking a new loan:
We must avoid unnecessary loans. If we have to take loans for some genuine reason, say for instance house building loan, then we shall try to down payment the maximum possible amount. It works very effectively as how to save money.
Moreover, repay it for the maximum tenure. It will lesser our monthly instalment amount. Therefore, we will get a chance to save some extra money so that we can easily accumulate at least the down payment amount.
Another way we may think that we will pay in bulk and repay as early as possible. It means we will pay lesser interest. At the same time, we will get more time along with money to save.
Furthermore, we should calculate the minimum down payment and instalment amount to repay the loan. Then we will calculate the instalment amount that we have to pay for the extra down payment. We must save the difference, at least.
The best option is that we must add the interest with the down payment amount for the entire term. Now we save that amount per month so that we can have the down payment amount plus the interest at the end of the loan paying term.
Otherwise, we should pay the maximum amount as upfront and repay the amount at the earliest and with quicker repayment time the interest will be not very much.
After that, we will save the instalment amount as our savings.
8.Set Realistic Time-frame for Goals:
For example, we may decide to buy a home/flat at a place after four years from now. If it costs rs.50,00,000 today, then in next four years it may easily go up by 20% i.e. rs.10,00,000.
Therefore, you have to save rupeess.50,00,000+rupees.10,00,00= rupees.60,00,000 in next four years. So you have to save rupees.60,00,000-:-48=rupees,1,25,000 per month.
Otherwise, if we have some down payable amount that will be deducted from the total amount. Say we have already Rupees12,00,000 in our savings. Then we have to manage rupees. 60,00,000-Rupees12,00,000 =rupees 48,00,000 i.e. we have to save rupees1,00,000 per month.
If this is possible, then the target is realistic. Otherwise, we have to rethink and set a new goal which is attainable. If we can accomplish our financial goals, then they will better our self-esteem.
9.Record our Expenditure:
Record all the daily expenses so that we can track all our expenses and maintain our budget which we have set at the beginning of every month. We need this to carry on how to save money successfully.
However, we have to record all our expenses and all expenses are very significant. It is not possible to keep a small notebook all the time. Therefore, we need to develop the habit of recording every expense and save all the receipts.
If we face some problem at the beginning, it will be easy if we do it for a few months.
We may use mobile apps that can help us to keep track of all our expenditures.
10. Take a Term Insurance Plan:
This is good for how to save money. We will try to take a term insurance plan of rupees 1 crore and take it as early as possible. It will act as a safety valve for our family in case of our premature death.
11. Be Cautious of Stock Market Investment:
If we have sufficient knowledge about stock market investment, only then we may invest in the stock market. Then it will produce a wonderful result as to how to save money. The stock market is very risky as from here we can gain or loss very quickly.
It gives a high amount of profit or loss. Without sufficient as well as proper knowledge, we must lose all the amount invested there. Only about 4% can make a profit from share market and the rest 96% loss their invested amount.
Therefore, we will be cautious regarding stock market investments.
12. Do Not Discontinue:
It is vital for how to save money. Indeed, some adverse situations may come in any body’s life when it became extremely difficult to carry on all the savings.
Even at that time, we will have to keep our nerves and try not to discontinue savings.
For this, we need a high level of a positive attitude.
13. Take Help of Investment Adviser:
To tell the truth, investment advisers are like doctors. They can advise us for better plans of savings and how much amount to save and where and how we will manage that amount. This is a very good step towards how to save money.
They take care of our health savings.
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14.Have no-spend days:
This is one of the best ways of how to save money. On these days we generally do not buy anything. We will follow this only once a month. Afterwards, we will try to make it 7days a month. In this way, we may think of a no-spend week or even a month.
It will not only help us to save money, but it can change our mindset in the long-term. We will then easily control the unnecessary purchase and save the amount.
15. Follow a 24-hours rule for purchases:
Another important way of how to save money is to follow the 24-hour rule for purchase. It means that we will purchase one thing at least after one day. As we have decided to purchase anything, we will not purchase it immediately. We will think over it for at least 24 hours and purchase it after that.
16. Follow the envelope system approach:
This is extremely important regarding how to save money. Here, we will maintain the envelopes of various monthly expenses. We will put stipulated money in every envelope to meet various monthly expenses. Once the money is totally consumed we will not be able to spend on that purpose for that month. Therefore, it helps to live according to our budget.
How to minimize expenditure:
This is extremely vital towards how to save money. Our positive attitude will help a lot to minimize our expenditure.
- Lessen Luxuries: If our savings is not sufficient, then we will lessen some luxuries and save the amount. First, we will check carefully our monthly expenditure and find out the luxury expenses that we will give up for the sake of our savings.
- House Rent: We may try a new house with lower rent but facilities will remain almost the same.
- We will try to reduce energy usage. (Also, read save money being a housewife. It will help us a lot in regard to how to save money).
- Avail Marketing Offers: Nowadays, many multinational companies provide various attractive offers and discounts and redeem point options. If we can take advantage, it will help us to have some extra money at hand.
Transport cost: If possible, save from transportation.
- Entertainment Cost: May minimize entertainment cost.
- Give up or fewer addictions: It will also help to have some extra money.
- Many people unnecessarily spend a lot of amount of food. We must eat cheap and nutritious food. We may choose a lot of fruits like walnuts, apples, bananas, mangoes and etc. Besides, we will follow healthy eating habits. Our foods must contain sufficient protein as well as antioxidants. Further, we will try to avoid going to restaurants frequently. It will be cheap if we can cook those items at home. We will also try to take the maximum discount facility. Also, read 1) superfood coconut, 2) honey- a healthy substitute to regular sugar and 3) olive oil
- Cancel subscriptions that we are not using.
- Plan free activities.
- Always shop with a list.
- Use discount codes and coupons.
Spend money judiciously:
We should spend money judiciously as an important step towards how to save money.
1)First, we shall make a list of absolute essential items and then we will spend money on them.
2)Second, we must create an emergency fund and save and ensure a minimum balance there.
3)Thirdly, we all use various creams including sunscreen to have flawless skin. We need to know the right order for daily skincare products to avoid wastage. Moreover, we may use many homemade remedies instead of costly creams. Furthermore, we need to know the right way to wash our face for clearer and healthier skin. Additionally, we must learn how to maintain the beauty of your face using homemade DIY. Together, all these will help us to save a lot of money.
4)Fourthly, we will consider our long term benefits due to savings and disadvantages of purchases.
5)Moreover, we will save a portion of the money, a minimum 20% of income at first and then start monthly expenditure.
6)Besides, we may spend on luxury if we have money at hand at the end of the month.
7) Further, we will review our regular spending to eliminate unnecessary spending.
8) Another way of how to save money is to cut down on food wastage.
9)Furthermore, we will learn to give importance to savings over products.
10)Besides, we need to understand the habits that drain our budget.
11)Moreover, we shall not try to impress others.
Save money quotes:
These quotes on how to save money may have a great impact on our life.
“Do not save what is left after spending, but spend what is left after saving”-Warren Buffet.
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”-T.T.Munger
“Look everywhere you can to cut a little bit from your expenses. It will all add up to a meaningful sum.”-Suze Orman
“He who will not economize will have to agonize.”-Confucius
These quotes simply describe how to save money. We need only to understand the meaning and follow it totally.
“Never spend your money before you have earned it.” —Thomas Jefferson
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” —Robert Kiyosaki
At the same time, we may do some freelancing jobs in our leisure time. It will help us to earn something extra. We will try to save the entire amount. This will produce good result towards how to save money in the long term.
If we can follow the above instructions, then it will help us a great deal to how to save money. We must show our gratitude towards various available savings tools in the market. Moreover, we will remain grateful to them who always inspires and suggests us regarding how to save money.
The toughest step towards how to save money is to start saving. This article may help you a great deal to develop a realistic strategy to achieve both the short term and long term financial goals.
This is very important that we will make sufficient savings and live a life full of happiness.
May read some other topics which may help a great deal in life.