Saving money off your expenses is really something that worries all! Well, these top 20 money saving tips will help you to save money for your future.
Ram is very hungry, so he buys a medium-sized pizza from an unknown outlet. He eats a piece and his mind quests for a beverage. Ram buys a 1-litre bottle of a locally made soft drink and drinks a glass of it immediately. He is thirsty too. After a glass of the beverage, he finds his stomach half full. He decides to eat all of the pizza, but his stomach gives up after three more slices with another glass of soft drink. The next day he wakes up with a poor stomach and headache.
Umm.. you might not be interested in the story of Ram. Replace Ram with yourself, the pizza and soft drink with your expenses and his hunger with your needs. Fast forward your life a little and replace the ailing Ram with your future self. The conclusion is straightforward that your pain in future depends on your decisions of the present.
Money is the essential commodity in the current era to survive. You might be working and living a lavishing life now but a day will come when you’d want to sit and relax. Who will handle your finances then? Your kids? Eh! Wake yourself up and stop daydreaming.
How to Save Money for Future: Top 20 Money Saving Tips
Saving money, planning for the future is the only independent way of living a happy retired life. Stop giving yourself excuses in the name of YOLO! or FOMO!. Be practical. Start managing your money to achieve your goals in future by simple 20 tips shared below:
You must be clear about the end goal of saving money. It may be buying a house, a property, a car or a regular monthly income. Your goal will help you in calculating the fund you need in future.
Keep in mind the inflation rate. Current costs will increase in future. The lump sum amount that you’d require in future will help you in deciding how much savings you’d have to add regularly.
For example, in India, if you wish to get a monthly income of Rs. 5 Lakhs after your retirement in 2050, you’d require a corpus of near around Rs. 5 crores. You might not be earning even two lakhs per month now, but you’d expect five lakhs when you’d retire. Thank inflation.
So think maturely. You can’t make such corpus by adding your savings to your piggy bank.
You have a particular source or sources of income. The amount must be within a range but limited. You know what comes in your hand at the end of the month. Start noticing down the inflow and outflow of money.
Use online tools or applications available to calculate your monthly expenses. Allot a fixed amount for monthly recurring payments like groceries, transportation, bills etc. Make a fund for bimonthly or quarterly expenditures such as car maintenance, tuition fees etc. And finally, calculate your monthly savings.
Budgeting is the very first step you should take to secure money for your future.
Savings should be untouched unless you achieve your goal. But, you can’t trust the variable life. Insurances are the best tool to minimize risks involved in our lives like accidents, diseases, disabilities etc.
An unfortunate incident hits your savings, and you have to compromise with your future by spending hugely on such an event. Ensure yourself and your dependents to mitigate life risks with insurances.
Term plans or life insurances and health covers are most important keeping in mind the deteriorating environment. Search for the best deal and take the benefit.
As discussed above, merely saving monthly for long-term won’t help you to build a massive corpus like Rs. 5 crores. Then, what’s the way the best way?
Multiply your money. Invest what you save in a public provident fund (PPF).
Why PPF? First, You get compounded interest. Second, investment is exempted from income tax. Third, the return is exempted from the wealth tax.
There are other instruments such as mutual funds, fixed deposits etc. which too offer benefits. Read about all such investment schemes and make a choice accordingly. Be aware of plans which are prone to market risks.
Extra tip: Don’t get confused with the investment instruments. Go to a financial planner and let her help you in sorting out your priorities.
Today’s luxury may hurt tomorrow’s need
You need a car to commute. You can buy a small segment car, but you buy an SUV or sedan because it looks luxurious.
You want to eat out. You can visit any regular restaurant, but you book a table in a fine-dining restaurant.
Every time you spend money on luxury you compromise with your future. Ram did the same. He was hungry; he could have bought a regular meal instead of pizza and soft drink.
It’s not necessary to live a starving lifestyle. Identify all the alternatives and then decide to spend on the best option.
Add value to yourself
Saving money and compromising are two different subjects. Saving money doesn’t mean you should stop caring for yourself.
For example, you are a freelance software developer. You are saving an amount every month. You know technology is changing rapidly and also the market. You need to learn a new programming language and get a certificate for your profile. But, you decide to work on older programming languages and save money.
Here, instead of thinking of spending money on a course, you should consider it as an investment on yourself. Add value to yourself so that your efforts give you more monetary output.
These are tough decisions. You should believe in yourself. A dent in the savings of a couple of months may give you significant returns in the near future. Hence, it can help you in saving more in future.
Quality v/s Quantity
Always prefer good quality over more quantity. It is likely that you can buy 3-4 local sports shoes at the cost of one pair of Nike sports shoes.
But the age of 3-4 local sports shoes can never match the durability of Nike. In the end, you’d have to spend more to buy new sports shoes.
Trust branded products. They are there to stay and compete in the market. In a longer run, quality products are worth the price whereas you lose more money when you buy a cheap product multiple times.
Remember, buying a product involves not only its cost but also your time and other resources like fuel and electricity. Each factor has its monetary value so prefer quality over quantity.
This brings us to the next tip.
Be brand wise
There exist so many brands which manufacture the same product in the market. Some brand offer quality products at relatively less price whereas some charge more than what a product deserves.
You can buy a good smartphone with flagship like specifications within Rs. 40,000. You also have products from a few brands which deliver their flagships in more than Rs. 40,000.
What will be your benefit if you a buy a phone which costs near around Rs. 1 lakh? A smartphone is just one example. Every product has brands which deliver excellent quality at reasonable prices. You should explore and identify such brands instead of spending huge because people are going crazy before a high priced product.
Save your money for future by being a smart buyer.
Discounts and Deals
The over the top services of the internet like online shopping, taxis etc. has created a new virtual market. Such services are backed by prominent financial houses of the world. To lure a vast number of people towards their products and services they are offering amazing discounts.
Healthy competition between companies is beneficial for you. Every time you buy something online, search for a discount opportunity or wishlist products and wait for a good sale.
Grab a deal when you discover a price drop and save money.
You get a promotion and a hike in salary. You decide to save the extra earning. Not a wise decision.
If you have an existing loan, then you should add the extra earning to your easy monthly instalments. With this, the tenure of your loan would get reduced. Consequently, you’ll save more by paying less interest on the remaining amount.
Restructure your borrowings whenever you receive an extra amount, either in the form of regular income or bonus. Interest payment is vast in a longer period.
We talked about insurances in the tip #3. There are various types of insurances such as health, life, accident, car etc. which are common. Then there are insurances which are very uncommon such as cyber theft, gold etc.
You can’t get an insurance service of every little thing. Moreover, it will prove to be very costly for you. What if you require instant money in cases of emergencies such as circumstances which are not covered in an insurance scheme?
An emergency fund is a liquid corpus of funds accumulated for unexpected and sudden causes. You may put a threshold value for such fund and add small chunks every month.
After reaching a threshold, you may add the emergency fund chunk to a vacation fund and surprise your family with a vacation plan.
A human brain has so many responsibilities in social life. You can forget to take out funds for your saving activities.
Hence, it is better to allow your insurance company or your bank to deduct the decided amount every month before you start spending for that month.
In this way, you’ll never end up spending the saving part of your income. You’ll be a dedicated money saver.
Calculating price by an hour
You found a leather jacket of Rs. 10,000 online on a site or offline displayed in a store. Assume that your monthly income is Rs. 50,000.
Your earning is Rs. 50,000 for 30 days, then Rs. 1666.66/day and Rs. 69.4/hour (assuming that it is the only income source)
Now, that jacket which costs Rs. 10,000 is equivalent to your 144.09 hours, roughly equal to your 6 days.
Think again. Are you sure that you want to spend your 6 days on a jacket? Or does that jacket deserve your 6 days?
Play with your mind with the help of simple math which plays with your money saving intentions when an expensive product appears in front of it.
Work on your health
Low risk of getting diseased is the best way to get ensured. Wake up early in the morning, go for a walk.
Eat healthy and on time. Sleep at least 6 hours a day. Take care of yourself. You will save the money that you might spend on a doctor or medicines.
Transacting online or through digital methods helps in effective monitoring of the expenses. Also, humans tend to spend more when the money is present in the form of cash.
Keep cash reserves low. Use debit/credit cards wherever possible.
Don’t hesitate in using public transport when it is convenient and takes an equal amount of time. Prefer buses, trains over the use of the privately owned vehicle for inter-city journeys.
Public transport can help you to save a significant amount.
Say no to credit cards
Credit cards are life-saver when used wisely. They prove to be the ‘Terminator’ of your pocket if you miss the deadline for repayment.
The interest rate is too high. It escalates so quickly in short span that the benefits of credit cards get overpowered by the losses.
Either use the cards wisely or don’t use at all. Avoid hitting your savings with the irresponsible use of credit cards.
Extra sources of income
If you own a house, rent a room. If you own a vehicle, rent it as a taxi. If you are good at writing, write a blog. Find out ways to make extra money from available resources.
You can also explore ways to monetize your hobbies such as writing, painting, teaching etc. Extra income means extra savings.
Shop with a plan
Shopping should be an activity which involves buying the stuff you need. You should not shop because you have money.
Shopping markets and multi-storeyed shopping malls are such bait for women. Restrict your personal shopping ghost and make a strict budget while going out to such a place.
Don’t give yourself excuses while buying a product. Buy only what you planned not what is shown to you. Save money by being a wise shopper.
You seek every possible way to provide yourself comfort when you start earning good like a maid, a cook, a driver etc. All the mentioned people help you in doing your work, and you pay to each of them every month.
In this way, you lose on two fronts. First, you start getting lazy. Second, you lose money you can save.
It is evident that an urban lifestyle is hectic. You need help in some form. But assistance in every way doesn’t make sense. You can assign a couple of work to servants, but you should prefer doing most of your stuff yourself.
Reward yourself with saved money by doing your work.
Money saving is a habit. You have to culture this habit for an extended period for best result in future. Your present may find today’s decision harsh, but your future will thank you for being harsh today.