1. Prepare a budget
Creating a budget will help you form the habit of saving. It will allow you to analyze your expenses and help you understand where you can cut back. If writing gets tedious there are a variety of apps available to simplify the process.
2. Use cash as opposed to cards
Studies conducted have revealed that people using cards spend 12-18% more than those who spend in cash. Try using cash for maximum number of payments. Psychology plays a large part here: Everytime you pay by cash that little feeling of letting go pinches you. This will ensure that you are careful about how much you spend.
3. Create cash envelopes
Create cash envelopes for all your monthly indulgences. Dining, Movie, Spa etc.
Once an envelope is out of money before the end of the month, avoid spending more on that particular indulgence.
4. Avoid eating out/take out
Not only is it better for your health but one can save a bundle on a monthly basis. Although it seems easier to simply order online, it can be heavy on your pockets. Skipping 1-2 meals can help you save uptoRs.2,000. Which can amount to a lot with the magic of compounding if invested.
5. Take a break from keeping up
The grass is always greener on the other side. Specifically, when it comes to social media. Don’t let your peers, friends influence you. Prioritize! Dining at fancy restaurants, holidaying by the beach, hiking etc. It can all wait until your priorities are in order.
6. Save in advance for big purchases
Let’s assume you have to replace your current refrigerator. Start saving in advance. Take a small portion of your monthly income and place it in a separate envelope. this way you can avoid a big hit at one go. Additionally, you will be saving subconsciously and cutting down on unnecessary costs every month.
7. Stick to the list while grocery shopping
Make an actual list and stick to it. This will help you avoid impulse purchases and ensure you buy the exact quantity.
8. Monitor and control your electricity consumption
Replace all your old lighting equipment with the new energy saving ones. Make sure you switch off not just the equipment but their socket switch to save more. Using the right kind of equipment can help you save as much as 30% on your electric bill.
9. Use coupons
Don’t be embarrassed. If you spot coupons or any discounted deals take them. It can help you save atleast 10% off your annual grocery bill. One of the world’s richest men – Warren Buffett bought lunch for Bill Gates using McDonald’s coupon.
10. Carpool to work, school etc.
Carpooling to work or school will help save money and the environment. It reduces your carbon footprint. Fuel savings can add up to as much as 50%.
11. Credit card offers
Credit cards should be used wisely. Understand their structure well before using them. Most credit cards offer a variety of discounts and have several tie-ups. Read up on what all they offer and make use of them. You can easily save close upto 20% on dining and 5% on fuel by using a credit card. Additionally, ensure you pay off your entire billed amount monthly before the due date to avoid debt traps.
12. Get insurance
We don’t realize it but health insurance for the entire family can help relief financial stress. It usually covers the doctor’s fee, medical tests, hospitalization costs etc. An adequate health insurance plan can not only provide peace of mind but also protect you financially if you get hospitalized.
13. Sign up for loyalty programs: store cards, airmiles
Most retail chains offer loyalty programs where every purchase made offers a 5-10% discount. We don’t realise but over time that can add up to a lot of savings. Check with your regular stores or supermarkets about these loyalty programs. Try and use a single airline more often to stack up on airmiles. It can fund you’re ticket to Goa.
14. Pay all your bills before the due date
You will save a lot by avoiding late fee. Just considering your phones, internet and electricity bills you can save up to Rs.5,000 annually. Technology has made tracking and paying bills a lot easier. Try and pay them off much before the due date. Infact, utility providers have begun offering cashbacks for paying bills before due dates.