How to Save Money?
There is an old belief ‘the rupee saved is equal to the rupee earned’ is true in each one of our lives. We need to save money for various reasons. For example, future medical expenses, children’s education, daughter’s marriage, age-old medical expenses, construction of the house, purchasing property, or for any other reasons. Some people earn more to ensure there is an excess income over the expenses so that they can save some money while many cut down their costs to save money for the future. Some people save money from their salary income, while households may save money at home from shopping activities. In this article let us understand how to save money, how to save money from salary, how to save money at home, and how to save money in India.
However, any route is fine if you do it in legitimate ways. Thankfully, there are a series of options through which you can save money. In this article, let us try to understand some of the most important routes to save money. Remember! Often small things make a big difference in your life. Even if it is a small saving also go ahead and do it. You see the financial transformation happens to your life that you would see over a period.
Now let us see some of the practical ways to save money
13 Tips to save money
- Stop Borrowing and start paying the existing debt payments
The first step in your journey would be to stop borrowing since it creates a new financial burden for your life. Though borrowing money would help you come out of short-term financial urgencies, it would trap in your interest web in later stages. The best example is using credit cards, overdrafts, and personal loans.
The amount you borrowed demands you to pay a certain amount of interest. When you make a habit paying interest, there would be chances you would forget the payment of principal since it will not bug you as long as you are prompt in interest payment. However, the interest amount you pay would damage your financial health since you have been paying money for something that is not adding value for your present cash conditions. Therefore, clear off your existing debt payments to save your interest money.
- Stop Using Personal Loans and Credit Cards
One of the best advice I always give to my clients is that “don’t borrow”. Some borrowers do not realize the importance of this advice until they get trapped in a financial turmoil. Some borrowers have a habit of making interest payments which are a major chunk of their monthly cash flow which is disastrous. Credit cards and personal loans carry the highest rate of interest compared to other financial products. Therefore, avoid borrowing from banks under personal loans and credit cards.
- Simplify your lifestyle
Having a simple lifestyle is a challenge for many individuals. Due to the advancement in media and communication technologies, people tend to imitate what they see on television and prefer to enjoy the same lifestyle as seen. Many of us bothered about status in society which often creates a lot of financial problems. Instead of spending on physical products, you can save money for your future financial security.
Prioritizing your needs is as important as earning money. You need to understand what is ‘need’ and what is ‘nice’ for your life. When you confuse between these two terms, you tend to overspend on something that adds no value for your life. For example, spending on a costly haircut when you are hungry. In this context hunger is the need of an hour but the car is a nice product to have. You can fulfil needs now and postpone the purchase of nice to have items to protect the value of your today’s money.
- Take Lunch Box with you
Taking lunch box to office brings you two advantages
- You need not wait for hotel food which often is unhealthy
- You can save money that you spend on having lunch at hotels
- Cut off your bills
Identity and cut-off your unnecessary expenses like telephone bills, internet charges, electricity bills, gas bills, petrol expenses. Postpone your shopping activities if they are not very urgently needed. Sometimes it is good to cut-off travel which drains your pocket.
- Choose the right place for spending time
The place where we prefer to spend time has bearing on our cashflows. Remember, those who visit coffee shops, restaurants, hotels, pubs, malls, friends tend to spent money a lot. Therefore, choose to visit the places where it is not required to spend too much money. For example, visit libraries, public utility parks, temples (not all the temples), mosques, churches, meditation centers.
- Reuse clothes
It is a good practice to reuse clothes for a certain period which saves a substantial amount of time. Often, we tend to throw clothes even when they are fit for use.
- Avoid Fast food, Alcohol, smoking, and other unhealthy habits
Some people spend a major chunk of their cashflows on fast food, smoking, drinking, and unhealthy practices like consuming addictive drugs. These items are constantly in nature and hence would damage your pocket deeply in case you lose control over such expenses.
- Save water, electricity, and gas
Use water, electricity, and gas only when there is a need. When you spend these resources unnecessarily, you are not just wasting your money, you are wasting the nation’s precious resources. Use LED and CFL bulbs to save electricity and your electricity bills. Using spray machines and vacuum cleaners would save water at home.
- Swap books, computer devises, music instruments
It is a good habit to swap books and electronic devices instead of making a fresh purchase for every single instance.
- Buy used items
Often we tend to spend on brand new purchases even when it is not necessary. For example, buying certified used cars, furniture, buying constructed houses, etc.
- Avoid unnecessary membership fees
Try to cancel that membership which you rarely use. Also, avoid taking membership if you are not a regular user of a product or service.
I hope you are clear about how to save money, how to save money from salary, how to save money at home, and how to save money in India. In our next article let us understand more about tax exemptions and permissible deductions under Indian Income Tax Act 1961. I hope you enjoyed the article. Please feel free to share your thoughts in the comments section.
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