The importance of money is no secret. In our life it is one of the most important parts. Gone are the days when the barter system was the main means of getting things. In this time, whether you want the requirements of life or want to get your dream house, money is what you essential to spend. To have a beautiful life even when you are not earning, you need to know how to save money.
Saving money isn’t a cakewalk and the biggest struggle is to start saving. If you are worried about how to save money, here’s a list of eight things you can do to save money.
Next comes budgeting, once you know your goal, it’s important to make a budget. Make sure that you maintain a specific diary for all your expenses and savings and record each and every one of it, even if that includes the most basic items.
- Spend less than your income
Each and every one of us is attracted to a luxurious life, most of us tend to spend all our income on maintaining a great lifestyle and some even tend to spend more than they earn. Try to spend at least 40℅ less than your income.
- Short term and long term savings
Remember that you have set some goals, now it’s time to separate them into two categories, long term, and short term. Long term goals include buying your dream house, retirement funds, child’s education, or daughter’s marriage. Whereas, short term goals include traveling expenses, Down payment for two-wheeler or four-wheeler, emergency funds, etc.
- Set a goal
If you are thinking about how to save money, you surely have something in mind. Sit down with a calm mind and write down your goals. Having a goal gives you energy and the need to save up. Talk to your family members, in case you are not able to point down all the goals alone.
- Cut down on your expenses
Once you are done with the budgeting and have also categorized your savings, it’s time to cut down on your expenses, find out areas where you can cut down. If you have subscribed to something that you don’t use, stop the subscription, cut down on your phone and electricity bills, and try to dine out only once a month and not regularly. This will help you to spend less and save more.
- Know where to save what
You need to know the best ways for your long term and short term savings. For your short term savings, you can save in your savings account but for the long term savings, you need to save in FDs, mutual funds, and invest in share markets.
- Be wise
Savings your money wisely doesn’t cut down on your short term savings to put more money on your long term savings. Remember both the savings are important, and so make sure that you invest equally.
- Keep records
The last step of how to save money is to keep your passbooks updated, it is very important to keep a record of your savings. It will motivate you to save more and fix savings related problems.