Four Smart Ways to Save Your Money

Look, I get it. Saving money is stressful. If you don’t know how to save, and stress over the fact that you can’t save money, you just get double the stress and still no money. But that’s okay. We’ve all been there, and whether you’re looking to become a millionaire before you hit 30, or you want to stop going broke by the 20^th of every month, or if you just want to save up a sizeable amount for emergencies, the following tips will help you get started on the path towards sensible savings:

Figure out your needs and wants:

This is the first, most basic rule that you’ve got to accept, understand, and follow if you want to have any chance of saving up anything at all. This is also a major stumbling block for most people looking to save money, and that’s why it’s at the top of this list. You need to first figure out what your most necessary items of expenditure are (for example rent, food utilities, groceries, petrol, transport, etc) and then figure out if there are ways of reducing your expenditure there. For example, you could car-pool to work instead of taking a cab, cut down on the snacks on your grocery list, etc. Then, you focus on those items you want and actually don’t need (and can live without).

Set a monthly budget, and live by it:

Yup, it’s actually that simple. Depending on how much you earn, set up a daily/weekly spending limit, and that’s it. All you need to do then is ensure you don’t cross it. This exercise will surely give you more clarity on how much you actually spend per day, and whether you need it or not. This will also help bring you closer to your saving goals because once you start following this regimen you will be more frustrated every time you exceed your daily/weekly limit. This will make you more cautious, which will help you save much more. This is similar to taking out a Personal Loan and saving enough to pay off your EMIs and manage your daily expenses.

Set significant goal:

When I mean significant goals, trying to get through the entire month on your paycheck without going broke does not count (even though you may think that’s pretty admirable). Think more along the lines of saving up ₹2 Lakh by the end of the year, or something similar. As I said earlier, saving up is tough, and can get pretty stressful. You want something to show for it at the end of the time-period, yes? When you set significant goals and meet them the first time, it really boosts up your morale and makes you more positive about meeting your savings goals for the future.

Save, and then spend:

Both friends as well members of my family have given me this piece of advice innumerable times, and trust me- it works. You can’t expect to have anything left by the end of the month if you have bad spending habits. That’s how you go broke. All you need to do is set aside a certain amount of money every month, and then simply forget about it. Fixed deposits (FDs) and Recurring Deposits (RDs) are a great avenue for saving this way. You go about your life, and your deposit accumulates interest, and on the completion of the tenure, you have a respectable amount sitting in the bank as your emergency fund. How cool is that?

Conclusion

Saving is not that hard if you put your mind to it. All you need is patience along with the willingness to save. You may have heard the popular adage about money, “Save me today, and I will save you tomorrow”. Well, with the four tips listed above, you will surely be able to start saving money well.