Saving Money
Beginner’s guide to save money
Here are 14 easy ways to save money:
By Team Shepays
2 days ago
The concept of saving money can come naturally to some people and can be quite mind-boggling for others. While some have the innate ability to hunt for bargains and find innovative ways to save money, others struggle to save up even to achieve a financial goal.
This has a lot to do with our lifestyle and attitude towards money. But it doesn’t mean that if you haven’t been a saver so far, then you can’t learn to be one! In fact, saving for the future can make you feel less anxious and secure in your present and be a better vision of yourself.
Here are 14 easy ways to help you start saving money today and make saving a lifestyle.
1. Draw up a budget: The very first step on the road to saving is drawing up a budget. Identify all essential and non-essential expenses and track your spending over the previous months to determine how you spend. Use this information to draw up a budget following the 50:30:20 rule.
This means, you reserve 50% of your income for essential expenses such as food and rent; 30% goes towards non-essential expenses such as entertainment, dine-out, travel and shopping. And the remaining 20% of your income must be allocated towards savings.
2. Automate savings: As soon as you have determined a minimum amount to consciously save every month, set up auto-debit instructions from your current account to route this amount towards savings. Alternatively, you can also set up recurring deposits to automate your savings. In doing so, you will learn to manage your expenses in the remaining income and slowly but surely build up your savings.
3. Pay your bills on time: Next, you need to figure out ways to minimise any kind of expense that is chipping away at your income and reducing your ability to save. Start by prioritising bills that need to be paid on time and which would otherwise attract late-pay fees.
4. Minimise retail debt: Retail debt is any short-term personal loan or credit card debt that you may have availed in the past. Retail debt can be available at an annual rate of interest going up to 30%. Therefore, it’s best to use it only when absolutely necessary and pay it off at the earliest, thereby saving on interest costs.
5. Pay off long-term debt: Long-term debt like home loans, education loans, or auto loans may be available at a lower rate of interest, but over time, they can still cost a lot. By paying off such debt through regular part payments, you can reduce your loan tenure and end up paying much lower interest.
6. Become a bargain-hunter: With major expenditures planned, now you need to internalise a saving outlook. Saving doesn’t mean that you don’t get to spend at all; instead, it means spending wisely. Look out for deals, cashback offers, and promotional sales to buy your favourite items and experiences. Try to find special offers on e-wallets or cards to pay for everything and get most of your money’s worth.
7. Reduce transport cost: Transport cost is usually inevitable and ever-increasing due to rising fuel costs. While there is no way around it, it can be reduced by exploring greener options such as dockless e-bikes, carpooling, and shared cabs. Any time you can replace driving to a place with walking or biking, do it.
8. Save on electricity bill: You can save on your electricity bill as well by switching to energy-saving appliances and LED/CFL bulbs. Also, plugging off devices when they are not in use can save you a lot of passive electricity usage.
9. Plan and manage subscriptions: If you subscribe to OTT platforms, cable, and magazines for entertainment, review your consumption regularly. Switch to cheaper plans where possible, and discontinue subscriptions you haven’t used in a while.
10. Reduce dining out expenses: Dining out may be convenient but piles up to cost a lot over time. By learning to cook simple meals at home or hiring a cook, you can save a lot on frequent dine-out expenses.
11. Avoid impulse purchases: If you tend to spend impulsively, avoid outlets and apps that fuel such behaviour. You can also follow the 30-day rule to defer any impulse expense for 30 days and ask yourself after this period if you still want to make the purchase.
12. Get insured: Health insurance and vehicle insurance may seem like unnecessary expenses but can save you from spending a lot when emergencies arise. Get insurance coverage for medical expenses, accidents, and hospitalisation to save long-term.
13. Avail allowances: Check your salary breakup for allowances offered by your employer. Travel and food allowances can save you a lot in taxes and help you plan your food and travel budget for the year.
14. Use money-management tools: All the above tips can help you save a lot but may seem overwhelming if you are new to saving. Get some help by using money-management tools and apps like ShePays.
With ShePays, you can learn unique ways to save money, invest in stocks and mutual funds, avail credit at competitive rates, find incredible shopping deals, coupons, and much more. You can monitor all your finances and maximise your savings from a single app.
Why is it important to save money?
Your savings can provide you with a financial buffer during emergencies and help you become financially independent. Savings can also be linked to personal goals and used to purchase assets or pay off debt.
Can you save more than 20% of your income?
Yes, of course! The 50:30:20 rule for budgeting is good in the beginning. But as your income grows, and you start managing your expenses better, you can increase the percentage of your income getting saved.
Why does ongoing credit card debt reduce savings?
Credit card rate of interest is very high. Even if you make regular payments, you may end up paying off just interest while the principal amount remains outstanding. By restructuring retail credit or minimising credit card debt, you will be left with more disposable income to save.
How do recurring deposits help in saving money?
Recurring deposits route money from your savings or current account to a deposit account every month. This way, even if you forget to save due to other commitments or lack of discipline, a portion of your income still gets automatically saved.
How can bargain hunting help in saving?
Finding bargain offers, deals, and discounts to buy what you want can build up to incremental savings. You can also buy more with the same amount of money.
How does the 30-day rule help in avoiding impulse purchases?
The 30-day rule makes you defer buying decisions by 30 days. Often, after this period has lapsed, your impulse to buy may have subsided, or you would only buy what you truly need.
How can you save more by availing of a travel allowance?
You can pay for your flight tickets and boarding with salary-linked travel allowances. This would reduce your miscellaneous expenses, and also give tax benefits.
How can money management tools help with saving?
You can track your expenses, limit category-wise spending, and stick to your defined budget by using money management apps. These apps also help you achieve your saving goals and automate savings.
Blog Summary:
Saving money can be easily integrated into your lifestyle if you know how to start and consciously cultivate habits that encourage saving. You can start by drawing up a budget and automating your savings. You can also manage your expenses more efficiently by paying bills on time and reducing high-interest debt. Furthermore, you can learn to hunt for bargains, reduce miscellaneous expenses, and avail insurance and allowances to make the most of your money’s worth.