How to save money and how to invest money are the most common questions on the mind of every earning individual. Sometimes the hardest part about saving money is simply getting started. To help simplify things for you, we have prepared the following guide on the easiest methods of saving money. With the right saving strategies, you can achieve both your short-term goals and long-term milestones.
1. Review your expenses
While expenses are a part of life, not all expenses are necessary. Tracking your spending and cutting back on unnecessary ones can help you save more. You can use a traditional notebook to keep track of your expenses or use new-age apps that are linked to your debit/credit cards and auto-track expenses. Reviewing your monthly credit card statement can also help identify unnecessary spending, such as frequent restaurant dining, food deliveries, and multiple streaming subscriptions.
2. Get clear on your goals
Simply saving money is not enough; you need to set a goal to stay motivated on your savings journey. Your savings goals can be short-term, like funding a vacation or buying a car, or they can be long-term, like saving for a down payment on a home or undertaking retirement planning. It is always easier to stick to a savings plan once you know what you are saving towards. Setting SMART goals that are Specific, Measurable, Achievable, Relevant, and Time-Based can help you save in a systematic manner. Once you set clear goals, you can calculate how much you need to save and invest to achieve the goal.
3. Understand your spending triggers
Spending triggers are essentially situations where you impulsively spend more. Identifying your spending triggers can help curb expenses and boost savings effectively. Whether it is stress, peer pressure, or simply a reward mindset, identifying your triggers will help you handle them better and avoid impulsive spending. Reviewing your recent unplanned expenses can be a great way to control your triggers. If you are always overspending when out with a certain person or when at a particular store, it may be a trigger pattern.
4. Pay off debt
Paying off debts is one of the best methods of saving money. Outstanding debts and delayed repayments can draw penalty charges that can significantly reduce your saving potential. Additionally, clearing debts can free up a part of your monthly pay check that usually goes towards EMI payments. Use a strategic approach to debt repayment. Start with high interest debts like credit card balances. If you have an outstanding loan, check if you can opt for a balance transfer and lower your interest liability.
5. Automate your savings
Automating savings is arguably the easiest method of saving money. To automate savings, all you need to do is set up an auto-debit mandate for your primary account. Doing so will transfer a certain amount of funds every month to a separate account that is entirely dedicated to savings. This way, you can reach your saving goals faster and curb overspending during the month. You can even opt for a sweep-in FD facility to transfer surplus funds into an FD account and earn higher interest.
How to save money
Saving money is a marathon rather than a sprint. Saving for the long term involves dedication and consistent effort. Here are a few tips that can help you save money on major expense categories:
Also read: How to Invest your EPF Savings
How to save money on groceries
Meal planning can help you save a significant amount on grocery expenses. You can buy those groceries and ingredients needed to prepare the planned breakfast, lunch, and dinner meals of the week, cutting down on impulse buys at the store.
How to save money on petrol
Consider carpooling or using public transport to commute to and from work. This will not only reduce your petrol expenses but also lower your carbon footprint. Other than that, regularly maintaining your vehicle and avoiding over speeding and unnecessary braking can also help conserve fuel.
How to save money on electricity bills
Install electric appliances with a high BEE star rating to conserve power. Appliances with inverter compressors help lower energy consumption and reduce your electricity bills. Incorporate lifestyle changes into your everyday life, like turning off lights and fans when not in use, switching to energy-efficient LED lights, using natural light during the day, etc.
How to save money on food
Preparing food at home can help control your diet better and contribute to greater savings. Limiting dine out plans to once a week or twice a month can help you save money. The saved funds can be directed towards short-term investment plans with high returns, like a Bajaj Finance FD, which offers high interest rates of up to 8.65% p.a.
How to save money on taxes
While taxes are unavoidable, efficiently managing your tax liability can help you save more. You can invest in tax-saving instruments like ELSS, PPF, and NPS to avail of deductions of up to Rs. 1.5 lakh u/s 80(C) of the Income Tax Act of 1961. This method of saving money can help you maximise your returns from prudent investments while lowering your tax liabilities.
Conclusion
Challenges are a part of life, and while we cannot always predict them, we can definitely prepare for them. Understanding the different methods of saving money can help you create a vital buffer fund against unexpected emergencies like covering the costs of medical bills, job loss, or sudden home repairs. Savings also help build a nest egg for your children’s future, covering their education expenses and empowering their dreams.
Saving money inevitably involves investments. With the saved funds, you can invest in a range of instruments that offer inflation-beating yields as well as ample capital safety. Company FDs are a great way of parking your idle saved funds and earning guaranteed returns on them. The Bajaj Finance FD offers high returns of up to 8.65% p.a. on special tenure investments to help your savings nest grow over time.
