EXECUTIVE SUMMARY: Saving money is considered to be a difficult task for many young individuals and families. With the continuous increase in the cost of living, it is really hard to save money in the limited salary. However, with some of the tactics like treating savings as an expense, preparing food at home, keeping a record of expenses, or using public transport one can save more. And once these habits are regular, one can easily sense its effect in the long term.
1. Treat savings as a monthly expense: Treating savings as a monthly expense can help one tuck away the necessary amount to be reserved for the future and therefore one can again keep a watch on the daily expenses. Hence, when one gets their salary, as a necessary expense, it is better to transfer a particular amount into savings. If at all one gets extra money in their hands, then definitely it would be treated as an extra way to get a pair of new outfit; or an expensive restraint to dine in. One better way can be automating the bank account through which a part of ones pay check gets dumped into savings and this is the best way to save without really thinking.
2. Careful investment with electronic purchases: The best example of today can be given by the difference between a TV and a laptop/PC. If we compare both these electronic items laptop/PC is way more useful than having a TV at home with a surround sound system. Does one really need a surround sound system? Moreover, having a PC/Laptop with internet connection makes one complete their work if any, provides entertainment with movies and serials, helps one download e-books, listen to music and a lot more activities which can be done on one gadget. It also saves one from incurring a huge amount on TV or a surround sound system or going to theatres with an expense on movie tickets. It is also useful for making long distance calls which again helps one save on the recharge amount or post-paid bills. One might feel that buying a laptop can become expensive, but when weighed with pros and cons, it may sound expensive at one point of time, but in the long run it becomes useful.
3. Preparing food at home: One can prepare lunch and breakfast by himself/herself while going for work rather than getting it from outside. Wasting an amount of Rs. 100-200 everyday may sound nominal when compared daily, but the total monthly expense may sometimes add up to a huge amount of Rs.4000-5000. And Rs. 2000 out of this amount if invested in an SIP or a mutual fund every month can accumulate a good amount. Cooking for lunch at home or having breakfast at home may sound a little tedious but this habit saves one from spending more than required on daily food. And an additional advantage is that one doesn’t always consume junk food which helps one to be fit and healthy!!
5. Papers are better than cards: These days very few people carry cash when going for shopping as everyone today has a card; one may just purchase anything and swipe it; assuming that there is quite a lot of amount in their bank account and one may pay for it later. This latter part of the period doesn’t usually come in the future. Hence, one ends up spending more than the required amount again. Keeping a handful of cash ensures one’s budget and thus one only looks out for those products which may come within their budget.
6. Keeping a track record of expenses: Last but not the least; it is always better for one to maintain track record of one’s expenses, thereby getting and idea of where one might need to cut down. Even if it is a nominal amount it is better to maintain a separate diary of such expenses. Nowadays quite a number of apps are also available which enables one to maintain a track record of their monthly expenses, thus making it much easier to gain access to it whenever one wants to.
Thus, just by getting habituated to the minimum number of wants, life doesn’t become difficult. It’s just a matter of compromise in order to save for own future. Also, giving these extra efforts everyday it can become a habit and one may get surprised on how much can be the amount of savings at the end of the year. This when looked at long term point becomes very useful.