We all grew up hearing the importance of saving money for future needs. However, it’s easy to say but a difficult task to do savings adequately. Saving a few hundred rupees by not eating at your favorite cafe is unlikely to leave a significant mark on the bank in the end. So, what can be the best way of saving money? Are there any tricks that can help you in saving money in an emergency? In this article, let’s see some tricks and tips to save money.
What are some tips to save money?
Set a goal
Setting a goal is one of the tips to save money that gives you an objective to achieve it. This way, your plans become much more specific. Write down how much you want to save each month and how you plan to save that amount. When creating a goal, be sure also to note the excess spending each month. You can then focus on reducing those costs and increasing your savings.
Cutting back on outside coffee, movies at the cinema, and takeout can make a difference to your monthly budget. That doesn’t mean you shouldn’t enjoy spending your money on things you love. You just need to budget and spend a little less to save a lot more.
Start a new saving account
The next point among the tips to save money includes starting a new savings account. We all have our savings accounts where we keep our money and our paycheck. However, this account will probably end up being an expense account. Mostly our savings accounts are linked to all our bills and an online wallet. As a result, it won’t be too long before you run out of money.
To increase your savings, you should consider opening a second bank account where you deposit money only for saving it without doing any transactions. When you open this second savings account, choose a bank that offers you good interest on your savings. That way, your money doesn’t stand. Still, it grows.
Open a recurring deposit
One of the easiest tips to save money automatically is by opening a Recurring Deposit (RD). For years, our parents and grandparents relied on RD as a way to save money easily. The concept of RD is straightforward – you just have to choose the amount of money automatically debited from your savings every month for deposits.
This debit is valid for a selected time, which can vary from a few months to a few years. Upon termination of RD’s right to use, you will be refunded the full amount accrued plus interest. You can convert the term RD into Fixed Deposit (FD) and reinvest the money. Or you can choose to deposit the money into your savings account.
Try to pay off your debts first
If you ask any expert about tips to save money, they will probably suggest you pay off your debts. One of the best ways to invest more in your savings is to reduce your monthly EMI repayments. Now paying off debt is not that easy, as said. For this, start with small goals which can be fulfilled easily. Focus on clearing higher interest rate loans. If you earn a bonus at work or money from freelance projects, try to pay off loans in advance. However, check if there is a penalty for prepayments. If you only make the minimum amount on your credit card bills each month, try paying more so you can pay off at least one debt faster.
Look for ways to curb your spending
All the tips to save money will only work when you control your expenditures. If you are finding it difficult to save as much as you want, it might be time to reduce your unnecessary expenditures. Identify non-essentials like entertainment and dining where you can spend less. Look for ways to save on your fixed monthly expenses (like car insurance or a cell phone plan).
List your financial priorities
Many people suggest many tips to save money, but the most important is to set your priorities first. After doing your essential expenses, your goals have a big impact on your savings.
For example, if you know that you will need to replace your bike soon, you can start investing in it now. However, be sure to keep your long-term goals in mind—it’s important that your retirement planning doesn’t take a backseat to your shorter-term needs. Learning how to prioritize your savings goals will give you a clear idea of where to put your savings.
Choose the right platforms
Another suggestion among the tips to save income is to choose the right platform. There are several platforms where you can save your money. There is an option for many savings accounts and investment accounts for short and long-term purposes. You have to choose wisely where you want to save and how many tools you want to use to save your money. Look carefully at all the options and consider the minimum balance, fees, interest, risk, and how quickly you need the money to choose the combination that will best help you save to meet your goals.
Use savings automatically
Almost all banks provide automatic transfer facilities for your checking and savings accounts. Here you can choose how much money you want to transfer and at what time. Amongst the tips to save income, there is also an option to split your direct payments so that a portion of each paycheck goes directly into your savings account.
Saving money has become a necessity of the time. The way we spend our money has changed so much in the last 12 months because of COVID-19. We all have faced a lockdown period which impacted our income sources a lot. Many people even lost their jobs during the lockdown. This increased the importance of finding some tricks and tips to save money. Whether you’ve been saving more or running low on cash, we all need to save money where we can. And these tips to save money all must be used in our life so that we can assure a bright and safe future.