We surveyed people; Only 12% of people said that they saved money every month. Rest agreed to the following statement “I would love to save money, but the main problem is that I don’t have enough money.”
Most of the people reading this, too, fall under that category. You might think your salary or pocket money is not enough or is equal to your expenses.
Your paycheck may have already been appraised, but you still don’t seem to be able to find the money to save, living paycheck-to-paycheck even with a steady income. It might’ve also reached the level that your sense of security has deteriorated and anxiety prevails.
Well, it is true, the best time for you to start saving was probably
5-10 years back, but the second-best time is right now.
There are two ways to find money for saving:
The first is increasing earnings, and the second being by reducing expenses. By the end of this blog, you will learn multiple ways to help you start saving without having to increase your salary.
Let’s think in terms of your last month’s spending. Think of everything that you paid for: no matter how big or small. Make a note of it on paper. And then sit back, take a deep breath and analyze where you might have spent less and saved more. Difficult? Let’s discuss a few examples:
Financial bills
Avoid paying costly automatic teller machine (ATM) fees by using only your own bank’s ATMs, and make sure you’re not paying your bank for any fees for services you don’t want or need like a bank statement, SMS alerts, late fees, etc. Be aware of the minimum balance and maximum transactions allowed per month; these charges are written in the fine print, which takes away a little money per month. Pay your utility and credit card bills a few days before the due date. The best is to automate the payments from a saving account/credit card.
Entertainment Expenses
Go to matinee movies instead of the more expensive regular runs, and look for cheaper-priced theatres offering “encore” films that have been out for a month or more. Buy your tickets online to receive the additional pricing deals or snacks coupons. If you are a movie buff, think of subscribing and sharing with a friend an online OTT (Over The Top) media service/video streaming services like Netflix, Prime-video, Hot-star etc. This may be cost-effective.
Vacation Expenses
Travel during your destination’s offseason. Buy plane tickets, hotel bookings several months in advance. Some companies offer 20% to 40% discount for people who purchase tickets & make bookings in advance. Some people love to travel alone and others in a group. Find a group to travel with, and you can bargain for a group discount too. Refer to many cost-effective websites like Airbnb, OYO Rooms, etc., before taking the final call.
Health Care Expenses
Take care of your teeth to prevent costly dental bills. In addition to brushing twice per day, flossing can help drive down expensive dental care—exercise for a healthier body and state of mind. Regular exercise over time can reduce healthcare expenses. If you are working in an organization, ask your Human Resources Department for company-sponsored health check-up camps, group insurance, hospital and Gym tie-ups.
Automobile Expenses
If you drive an automobile, learn how to take care of your vehicle. Check the air pressure in tires regularly. Learn how to change the oil rather than paying someone else to do it. Discuss with multiple mechanics/agencies and make a checklist of points to do and not do for your automobile. Maintain the log of repairs and services done in one file so that your mechanic and you can refer to it and avoid too early or too late servicing and replacement. This will help you preserve your car’s life and get a better deal when you plan to sell the vehicle.
Electricity Expenses
Lower your electric bill by forming a habit of switching off appliances as you leave the room or installing sensor-based equipment. Insulate your windows and doors better; Don’t let water geysers heat till cut off; Open windows for fresh air than using your air conditioner. Program your air conditioner as you sleep to switch off as per your need. TV, Laptops, mobile chargers, extension boxes typically remain in sleep/standby mode instead of being shut down and remain plugged ON unnecessarily. These conditions consume energy too and increase your bill. It is better to shut down than sleep.
Food Expenses
Bring your lunch to work. You’ll quickly realize how much money is saved after one month of “brown-bagging.” Try putting yourself on a lunch budget whereby you treat yourself one or two times per month. Also, monitor your tea parties, eat-outs and Swiggy/ Zomato bills. Order when in need and not for desire. Find cost-effective offers and options instead of ordering from the first available.
Last but not least, remember that you can save money only by monitoring and comparing your expenses to a standard. Here are two thumb rules for you.
The 50-20-30 rule:
50% of your income should go to living expenses and essentials. This includes your rent, utilities and things like groceries and transportation for work.
20% of your income should go to financial goals meaning your savings, investment, and debt reduction payments
30% of your income should be used for flexible spending. This is everything you buy that you want but don’t necessarily need (like money spent on movies and travel)
The 75-15-10 rule:
75% of your income should go to all your expenses: living expenses and essentials (like rent, groceries and transportation for work) and flexible spending (like money spent on movies and travel).
15% of your income should go to financial goals meaning your investment, and debt reduction payments
10% of your income should be used for savings till you have saved six months of expenses. Then this money can either go into investment or in spending.
Author – Ms. Aliya Ansari
in “Oxford Public School”, Mumbai.
