How to save money is a question that bothers the rich, the poor and of course the great Indian middle class. The amount of money we need to save and the saving methods we use may vary but the need to save money is common to all.
Whether you're trying to figure out how to save money from your salary or simply looking for money-saving ideas that will help you save more money each month - we've got some money-saving tips that you can use.
In this story we will touch upon:
How to save money from your salary
How to save money every month
Smart investment methods
How to use tax-saving methods
Let's jump into the steps that will help you save money:
Make A Budget For Yourself
Create a strict budget for monthly expenses and put all money besides it in a separate account. Identify where you overspend and where you cannot compromise. Most importantly, stick to your budget - unless there is an absolute emergency!
Set Realistic Financial Goals
Decide how much you want to save by the end of the year. Divide that by 12 - you now have your monthly savings goal. For example, if you want to save Rs. 1,20,000 in a year, you need to save Rs. 10,000 each month. So start by setting that money aside at the start of the month - on your payday.
Create An Emergency Fund
Putting money away is difficult but it's a good idea to set aside a part of your savings for an emergency fund. It is easier to do so when things are going well than selling off your assets when you're in dire need of liquid cash.
Save Tax By Investing Wisely
If you're salaried professional you know exactly how much tax you will owe, so why not take preemptive measures to save tax? You can save up to 1,50,000 under section 80C alone using Fixed Deposits, Equity Linked Saving Schemes etc.
The ultimate killer of all saving dreams is debt. If you owe money to the bank for a loan or simply tend to max out your credit card - you're in trouble. You must pay off your debt first and if you have credit cards try not to overuse them - in fact for many it's best to not use credit cards at all.
Pay Yourself First
What that means is you must ensure you invest money before you start spending on things that are avoidable. The money you work so hard to earn should work just as hard for you. So, invest in a Systematic Investment Plan a.k.a SIP that will set aside a small part of your income each month and invest in mutual funds. This is one of the best ways to invest money.
Many of us find it easy to swipe a card, make an online payment, send money via NEFT etc. These methods detach us from the physical act of spending money, thus making it easier for us to spend money. Try using actual currency notes for day to day payments - it will really help you avoid unnecessary expenses.
Bonus Tip: How To Save Money Fast
If you want to save money fast in a relatively safe manner then you must consider some high risk, high return short-term investment plans. You read about the Best Short Term Investments here.
However, we recommend you consult a professional wealth advisor before making an investment.
Rishabh P Nair
Rishabh P Nair is the Head Of Brand Content at Cube Wealth. Rishabh has been weaving stories for over 10 years and prides himself on building brands with a strong identity.
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