Money makes the world go round. This is why you need to learn how to make money and how to keep it. It is undeniable that when you have some savings, you sleep better at night. You can also dream of a happy tropical vacation with your grandchildren if you are putting in the majority of your efforts to sketch out plans, save money, and make money.
Saving money is as strenuous as making it. Here are some basic hacks you need to incorporate in your life to multiplying your savings at a rate of knots:
1. Create a Budget
If you know how to evaluate your income and expenses, you know how to save enough. The following are some money-saving tips that help you create and manage a budget.
The first way is to spend according to your set percentages:
- You can use a 50-20-30 monthly budget planner. Herein, you spend 50% of your total income on necessities, 30% on wants, and save 20%.
- Another way of using percentage is to use 60% of your income as your committed expense (your monthly expenses and bills) and rest 40% in your savings.
The second hack is to manage your budget is by taking out a specific amount for every task:
- You can divide your money into separate categories and put the cash accordingly in envelopes kept for each category. In this way, you will use up a limited amount of money in total and, hence, save a decent amount.
- Allow yourself to spend money on only one of your wants. If you value shopping more than traveling, then don’t spend money on traveling.
Thus, with these money-saving tips, you can easily maintain your budget. If you are still not able to maintain one by yourself, you can keep track of your expenses using certain apps like the Expense Tracker and Money Manager. Having such an app allows you to have a personal budget planner with you throughout your money-saving journey.
2. Know Your Expenses
After you set up your budget, you need to stay on that. Tracking expenses daily is essential if you want to stay within your pre-defined spending limits and learn how to save money. If you don’t tally on what you spend against your earnings, you won’t know when to stop spending in a given category. If you know where your money is going, you’ll be able to get conscious of your negative spending habits and correct them. Hence, another point on the money-saving tips list is to know what and where you spend, as it will help mushroom your savings. All you need to do is spare 5 minutes to keep a count of every penny you spent in a day in a notebook.
3. Avoid Overspending
Imagine, you are tracking your daily expenses and working well according to your monthly or weekly budget planner. But one fine day, in the middle of the month while going to work, you come across a sale signboard where you see those admirable leather shoes. Looking at the special offer price and hypnotic display, you’ll probably fail to realize that the sale won’t save your money but blow it. At this point, you need to take a pause and ask yourself, ‘Do I need this?’ If you don’t need it, don’t let the inviting price pull you towards it easily. Procrastinating before buying helps you to avoid overspending, stay on your budget, and save more.
4. Clear Debts
Savings often fall apart when you have debts. You might have several due to clear like EMI’s for one (or multiple) loans taken for any purpose, balance on your credit cards, and more. If you don’t pay them regularly, you may get a lot of interest accumulated that ultimately pulls you into a vicious debt cycle. On the contrary, when you are debt-free, you are in a more favorable position to save. Thus, before saving, clear all those dreadful debts.
5. Maintain Records
Many documents, like your medical records, insurance records, warranty cards, bank records, ID cards, income tax records, etc. have long-term financial implications. If you have a poor record keeping, you can have a monetary loss that could deplete your savings. This raises a need to keep separate files for proper documentation of your records and transactions so that you can take benefit from them at the right time.
6. Proper Investment
Your parents must have narrated the stories of their childhood, where they managed to buy chocolates for a fraction of their present cost. This cost-push is called inflation, and the same can happen to our savings as well. Suppose if you manage to save $1000 and stash it in your locker, then 20 years from now, the value of your savings will reduce as prices will go up. This won’t make you lose your money but will decrease its net worth. So next time you save money, you should plan on investing it as well. Proper investments like term deposits, gold/silver, mutual funds, stocks, etc. help you to grow your savings over time.
7. Using Coupons, Discounts, and Gift Vouchers
When questions like, ‘How can I save money?’ or ‘Where to save money?’ rush through your mind, your eyes always try to find cheap price tags. But you don’t need to compromise with the quality of the products you use. You just need to follow some basic tricks to snatch a good deal.
- Shop on the right day. Most stores put up discounts and offer on specific days like Wednesdays or Fridays.
- Use coupon codes strategically.
- Sign up to newsletters, coupon sites, and promotional lists to save money on regular expenses.
- Abandon your shopping cart and wait until you receive a discount coupon. Many e-Commerce sites try to lure customers into buying things they abandoned by pushing out some deal or discount.
Why Multiplying your Savings is Important?
We save because we can never predict what the future holds, and with this uncertainty, running out of funds is the worst thing one wants. For instance, if your phone breaks down, you can use your savings to buy a new one. Or say, your cousin has decided on a destination wedding. Your savings come to the rescue and allow you to book a flight. To the worse, the whole world is hit with a pandemic leading to loss of jobs and funds. Savings are still there to your rescue. Thus, if you have some extra money in your savings account, you will never have that last-minute stress. Besides, if you are multiplying what you save, you can buy the freedom of doing what you love later. You can open a small business, travel the world, and the list never ends. Moreover, savings not only help us but can also come handy if a loved one faces some financial problems. Additionally, your savings help you to be financially secure when you retire.
In short, money-saving habits help you cherish a high standard of living even when you stop working, strengthening you psychologically, emotionally, and physically. Those who know how to increase their savings have a much lower possibility of entering a financial crisis. Hitting the last nail, everybody wants more money, but only a few learn how to save money every month. You surely won’t lose anything by saving but gain a happier future. Practice these hacks to increase your savings exponentially and unlatch a happy future.