We are always on the lookout of ways to save money. The smile and sense of accomplishment we get when we save money is priceless.
Many of us start to aim higher when we have some savings in our banks. New home, car, home appliances are planned only when we have savings in our accounts.
SO, how to save money….
There is a famous story – a great businessman lost everything he had when he made losses. He went bankrupt and didn’t even have money for his next meal. Tired and exhausted, he was sitting in a park. A man came and sat next to him in the bench. He looked at the businessman and asked, “What is troubling you my son?” Businessman narrated his entire story to the old man. In the end, the old man smiled and wrote a cheque worth $50,000 and gave it to the businessman.
With rejuvenated energy and feeling of financial security, he took strategic decisions which made his business grew multifold. The businessman wanted to return the money to the old man, so he visited the park where he first found the old man. The septuagenarian was at the same place as before. When the businessman was about to return the cheque to the old man, staff from a mental asylum showed up and zapped the old man. They were taking him to the asylum. The businessman learned the old man was a mad who absconded from the asylum, and the cheque he wrote was phony.
The moral of the story is savings can usher in a sense of financial security, thereby helping one progress in life. There are many ways to save money, a few has been stated in the blog.
Tip #1: Create a Savings Account.
This is a tip which I personally followed. When I had to save money for my marriage, I created a savings account apart from my checking account. Internet banking offered me the option of automatic money transfer from my checking account to the savings account. I set the savings amount to be transferred and the date of transfer. On the preset date, the money automatically got transferred. This is how I saved without much hassle.
This savings gave me strength and intent to plan beautiful things for my wife such as honeymoon, new home and other amenities required after marriage. I personally suggest this as one of the best measures in saving money without budgeting.
Tip #2: 50/20/30 Saving Plan
Every person will have 3 kinds of expenses, the first one is his monthly bills such as water, electricity etc. Number two being is his savings such as fixed deposits, recurring deposits and number three is his lifestyle expenses like clothing, entertainment.
Understanding these three types of expenses is essential to have a healthy financial life. Each is distinct and essential in its own way. Senator Elizabeth Warren, along with her daughter Amelia Warren-Tyagi, introduced the 50/20/30 budgeting rule in the book “All Your Worth”.
In the book, they stated that 50% of your income will be spent on the essentials such as rent, electricity and other monthly bills. 20% should be spent on savings such retirement savings, down payment for your home. The remaining 30% can be spent on lifestyle expenses. When the lifestyle expenses are properly planned, there can be further savings.
This tip is continuation of the previous tip. Once you have mapped out your expenses, you can have target accounts for each expense, a savings account to maintain your savings, a checking account for your lifestyle expenses. Prefer using debit cards and don’t use your credit cards for any of your lifestyle expenses. This will help you to keep a tab on the money flow and will help in identify areas where you can avoid the expenses.
Tip # 3 Use Technology
In this technology savvy world, everything is available in our smart devices. Savings plan can be made using our smart phones. Gone are the days, when we used to maintain an excel spreadsheet to monitor our expenses. Now our jobs are made easy by various savings app. There are numerous free and paid budgeting and savings apps.
Digit is such an app that automates your savings. It is connected to your bank account and often analyses your spending pattern. Then it takes small amounts of unspent money every week and transfers it to your savings account. You are informed about the saved amount via text message. All the transactions are done through text messaging, for example, when a transaction is to be made, an SMS sent to digit eases the process. This app saves a lot of money and time.
Qapital is another app that helps you save money by using rules or more specifically “If then” formula. When one of the rules or goals you’ve set is triggered, the money is saved. There are penalties for not completing the target and the money can be taken away from your set expenses. It instils fresh energy and fun on saving money.
Saving money can be easy when we choose the right ways. Investments are also one of the options you can look for to grow your money. Savings will help in having a secure future while you enjoy your present. We have spoken at length about the various ways of saving money.