Right from school to college we study for a good paying job. We do get good jobs and earn money too. But most of us don’t learn how to manage and save money. Saving money is as important as earning it, because it is said- Save for a rainy day! Save for your future!
The most important goal of saving is for an emergency fund. Emergency fund is a backup fund that’s large enough to handle serious, unexpected expenses, such as a costly car repairs, home repairs, medical emergency, or even loss of job.
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Today, in this article we shall discuss certain ways on how to save money. If you follow these best ways for saving money properly, then saving will no longer be a difficult task.
You can read: The Best Saving Plans & Schemes in India
How To Save Money
With the help of the following points, you will get the solution to the problem of how to save money.
1. Save First Spend Later
Due to lack of financial awareness, most of us first think of spending on all the expenses and then whatever money is left they plan to save. But, what happens is that there is no money left in the end. The most effective way of saving money is that you must withdraw at least 20% as soon as you get your monthly salary or income and put it aside for saving. With the remaining 80% you must manage your expenses. If your salary is Rs 20,000 then you must withdraw Rs 4,000 in advance for savings. You must understand that your salary is only Rs 8,000 and you have to run your house in it. For this you can also automate your savings.
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2.Use A Credit Card
Most people advise you not to use credit cards. But my opinion is different. If you have a credit card, then you must use it. The main advantage of using a credit card is that it gives you the facility of interest free credit that too for 45 to 50 days.
If you need to buy some items in an emergency, then you can use a credit card instead of borrowing money from someone on interest. You get a period of 45-50 days to pay the amount without any interest.
Benefits of credit card
- Helpful in emergency
- You get free credit facility of 45 to 50 days
- By using credit cards, we get many rewards which we can redeem by taking cash or some other stuff.
- Many times we get good discounts when we shop online.
But along with the benefits of credit cards, you also have to keep some things in mind. Always make sure to pay your credit card regularly on the due date and avoid unnecessary spending on the credit card. If you can do both of these things then you should use a credit card.
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3. First Pay Off Your Debts
The most important tip on how to save money is to pay off all of the outstanding debts that are taking up the majority of your income. Debt not only makes you feel miserable, but it also raises your expenses because you can’t avoid paying interest. If you prioritise paying off the debt before everything else, it is simple to save the money spent in interest. Consider making a larger monthly payment than is required. When you receive an annual bonus, it’s a good idea to pay it all at once.
4. Start An Investment You Can’t Stop
For those wondering how to save money each month, one of the best money saving tips to follow is to start an investment scheme. You can invest either in a long-term insurance policy, an RD (recurring deposit) or a National Pension Scheme. This way you will have to invest a certain amount every month, regardless of what your expenses are. In order to ensure that you have sufficient funds in the long-term you must start the habit of investing early on. However, since these investment schemes can’t be liquidated easily, you will still have to save additional money for an emergency fund that you can access immediately.
Another kind of saving scheme where you can invest at regular intervals is chit funds. In a chit fund saving scheme, a group of subscribers save a fixed amount of money every month. You can save money from your salary to invest in chit funds each month. And when the need arises, you can bid to borrow a lump sum at affordable rates. God forbid if you are faced with a financial emergency, the chit fund gives you a quick liquidity option to tide over the situation.
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5. Look For A Side Income
If you feel you are not able to save from your existing income, then you should try to look for a side income. You can start any work based on your hobby or start a freelance work or try a part-time job but, the main purpose of this extra income is to help you save. Nowadays, there are various online ways to earn more money from home.
You can read: Earn money online without investment
6. Repair vs Replace
Try not to replace anything that can be maintained. Ask yourself – Do you really need the absolutely latest phone? Can’t you repair the washing machine that stopped working; do you immediately need to replace it? Most of the time the answer you get is a ‘No’. Most things can last much longer than you use them for. The best way for saving money is to try to maintain, service, and repair as much as you can. You’ll be surprised by the amount you can save every year just using more of the product.
7. Alternate Of Objects
Due to huge competition these days, new companies launch their products at cheaper prices without compromising on quality to survive in the market. So you can always search for alternatives of the products you choose. It will ease your pocket. This is one of the best money saving plans.
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8. Continue With The EMI Of The Discontinued Loan
Suppose you had any loan for which you were paying monthly installments (EMI). Once it is completed, do not stop the EMI. That is to say, you don’t have to pay that EMI to your lender, rather you can continue to pay that EMI to yourself. You can invest that EMI money in a recurring deposit or a chit fund scheme. Getting into the habit of saving can be a bit difficult, but trying this habit can help you create financial security for yourself.
9. Off-Season Shopping
Things are cheaper when there isn’t much demand for them. For example air conditioners are cheap during winters. Woolen clothes are cheaper in summer. If you absolutely need something, then you have to buy it. But if it is possible you can postpone your purchases for times when they aren’t much popular. If you wait for an extra month, you will note that stores usually come up with huge discounts.
10. Reduce Your Existing Debt
If you have more than one loan you can consider debt consolidation where you consolidate all your loan liabilities in a single place, making it easy for you to repay your installments. This will save you a lot of money. A credit card is another form of debt that you incur. If you default on its payment by one day, the interest charged is huge. So, if you are using credit cards make sure that you pay back on time.
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Everyone earns money, some earn more, some less. But those who save money and invest them become rich. The golden rule of saving is that it must be done in a disciplined and regular manner. So, friends, if you liked this information about how to save money and the best way for saving money, then definitely share it with your friends and family.