Money saved is money earned. The moment we have some excess money in our hands, the first instinct in most of us is to spend it. While spending on basic needs is obviously a necessity, spending on extravaganza is not. But it’s always the extravaganza that tempts us to spend our money on, as they seem to have better potential to give us instant gratification and short term pleasures.
In the present day of seeking instant gratification in every aspect of life and the culture of Credit Card that leads the way towards it, many of us meekly get into a debt trap. Once you are caught in unbridled spending habits, tendency to save takes back seat. Hence, saving money must be inculcated as an enforced habit in us. Here are some ways to save money:
(1) Let your first expenditure be a saving
This is a famous and a pregnant statement. The first habit you should develop when you start earning on your own is a strict discipline to put a small percentage of your income into savings on the very day of your receiving the pay check. For that, you should open a Recurring Deposit account in your Bank and give standing instructions to the Bankers to debit a specified amount automatically from your Checking Account to your Recurring Deposit account on your pay-day.
Thus you will have only a truncated amount for withdrawal and you will automatically develop a discipline to curtail your expenditure to the available amount.
(2) Never utilize the “minimum amount payable” facility in your credit card
Living within your means is a time-tested and age-old wisdom which is unfortunately forgotten in today’s Credit Card culture. What you buy using Credit Card should be payable IN FULL by you when the bill arrives from the Credit Card firm. If you get lured by the “Minimum Amount due Now”, it paves the way for accumulation of debt.
If the object of desire can be purchased by you only through installment by utilizing the “Minimum Pay-out Money”, DO NOT SUCCUMB to the temptation of purchase. By bringing in this self-control, you may lose short-term pleasures, but you will enjoy long term peace.
If you find it too difficult to curtail your temptation to go on a spending spree just because the credit card is there, you can think of an enforced discipline on you – use a debit card and discard your credit card!
If you have the habit of wielding multiple credit cards, keep just one and get rid of all the others.
(3) Never indulge in unplanned purchases
Let every one in the family know that there is an upper limit for spending on gifts. Do not encourage your partner of your children to pester you or cajole you to get a costlier items than what you have budgeted, particularly when festival and gifting seasons like Christmas arrives.
(4) Avoid last minute purchases
If you are purchasing goods and gifts during a festival season, why should you get tensed up amidst surging crowds, irritable salesmen, hiked up prices and long and winding queues? Why don’t you shop much earlier before prices get hiked up to rob the last minute shoppers? Better still, why not shop comfortably sitting relaxed just in front of your computer by purchasing straight away from ebay.com, Amazon.com, target.com or the like?
Remember: A trip to the prestigious shopping mall with the entire family in your car will add lots of peripheral expenditure like cost of gas, impulsive but unwanted purchases, in snacks, drinks and other refreshments, which you can totally avoid by your purchases through the internet. You can always look for cheaper auctions too in these sites.
(5) Try second hand items at Garage sales
What one person wants to throw away could be a treasure for another. Why don’t you try to visit garage sales in the neighborhood if you have a particular requirement in your mind? Perhaps you can save considerable money, if only your hunt becomes successful.
(6) Buy in bulk, if consumption and storage are not issues
In India, our grand mothers practiced a habit of buying pulses, tamarind (which is an essential ingredient of cooking in south India), Chilli and other spices at seasons when they will be available at the cheapest prices and in plenty. They will procure their stock practically for an entire year and store them in bulky containers, suitably protecting them from moth and rodents. This way, our grand mothers saved lots of money.
Though the present generation in urban locales has practically forgotten this wisdom, it is still practiced in rural India. But we can always practice a toned-down version of this habit. You can always buy much larger packs (like detergents, shampoo, tooth pastes, energy drinks etc) where buying in bulkier quantity saves you money. Instead of planning your budgets every month, you can always plan for budgets on these items for a stretch of 2 to 3 months.
(7) Reduce eating out
No explanation is needed on this advice. Eating at home is far more economical, healthy and nutritious.
(8) Travel less
If your place of residence is much closer to your place of work, you not only save quite considerably on conveyance, but you can save time and strain of traveling too.
(9) Reduce frequency of holiday trips
Holiday trips are obviously the greatest money drainers. If you have the habit of going on a holiday trip every year, start making them in every alternate year.
(10) Downgrade your mode of transport
If the distance you have to travel can be walked, avoid your bicycle. If the distance to be covered can be done by cycling, avoid a using a scooter/ motor bike. If you can do a trip with a scooter/motor bike, avoid taking a car. If you can go by a public transport (bus/ suburban train/ tube rail) don’t take your car.
(11) Talk less over cell phone
It’s a very obvious but an extremely difficult proposition for most. Right?
(12) Shift to a cheaper locality
If you live in a rented house, house rent takes up a major chunk of your income. Instead of residing in a costly and prestigious locality, if you can shift your residence to a suburban where house rents are much cheaper (provided you have cheap mass-transport facility like suburban train service to commute to your office), you can save a considerable amount.
You may think that not all the modes of saving money discussed above are painless. The more you get used to certain avoidable and unwanted luxuries, you may initially find it somewhat painful if you have to come out of them. But the question of saving money would not have come unless excessive spending or lack of bank balance has already started hurting you. Before the problem snowballs into a major pain in life, you can always wake up and save money, tolerating some minor pains in the bargain!