Of all the objectives that you have in life, saving money for yourself and your family’s future requirements is one goal that should be there on the top of your priority list. The significance of building a nest egg is instilled into us right from our growing up years and therefore its imperativeness certainly cannot be underestimated. There are umpteen reasons why you need to save money and each one is as vital as the other.
Perhaps the single most important reason you need to put aside money and build a neat sum is to financially secure your future, post retirement. However, in this context, it won’t be out of place to suggest that given the uncertain times we live in, you’d need to set aside a fixed amount for various emergency needs. You never know when you may fall sick that might keep you bedridden for days on end. You might suffer an injury or get wounded while working or may lose your job.
In case you have a family, you’d have to provide for their present and future needs. For instance, you’d have to pay for your children’s education, and pay for your parents’ medical emergencies. Likewise, there could be thousand other reasons for putting away a specific sum every month from your monthly earnings. However, saving money also implies cutting down unnecessary expenses or outlays on food, housing, clothing, banking, insurance, transportation, friends, house heating and cooling, and entertainment and so on.
Many of us are in the habit of using credit cards at the drop of a hat. Most often we end up spending money on impulse as we know that we can satisfy our urges by paying through debit or credit cards. So, carrying a limited amount of cash or using your plastic money very sparingly would be a splendid way of reining in your extravagant expenses and save money. Saving money is also not only about using discount coupons while shopping for necessities or luxuries but about creating a contingency fund so that you can keep footing bills from month to month. Always remember that money saved is money earned.
Saving money would require you and your family to make a lot of sacrifices. For example, you’d have to take fewer vacations, go out less frequently for dinners or lunches, and refrain from buying expensive apparels or shoes frequently. Making these sacrifices can indeed be hurtful but will undoubtedly pay off in the long run. Nevertheless, there are numerous prudent Ways To Save Money and not all the ways are painful. In fact, some of the techniques require very little effort from your end.
1. Get Rid of Your Arrears in the First Place.
Most of us blow up a portion of our earnings in paying off EMIs for car loan, house loan, personal loan and all other sundry mortgages. Despite being regular in your payments as far as your debts are concerned, they never seem to end. In fact, they keep recurring month after month with renewed vengeance.
The best way to get rid of your debts in the earliest possible time would be by keeping track of your expenses on debt every month. At the same time, meticulously calculating the amount of your unpaid dues will help you insetting the time frame by which you intend to settle your debts. Once you have cleared your debts for good, you’ll be freed from the burden of apportioning an amount every month towards debt repayment.
2. You can Redirect that Amount to your Savings Bank Account.
Moreover, clearing your debt as quickly as possible also means you pay less interest on a cumulative basis. So, you get to set aside that sum which would have gone towards interest payment.
3. Give Yourself Enough Incentives to Save.
Since saving would require you to put up with a lot of sacrifices, you’d definitely need enough inducements or motivations for the same. You’d need to make a list of incentives that’d inculcate you to save. Now, as far as short term objectives are concerned, you’ll find it quite easy to make a listing.
For instance, you surely won’t need to plan elaborately for buying security film for windows in your home or giving your entire house a fresh coat of paint. The reason is simple enough. Such expenses don’t burn a hole in your pocket. But when it comes to planning for long term purposes, like purchasing a house, you’d have to be more methodical and sagacious.
Since your EMIs for a home mortgage would be spread over a period of at least 15-20 years, you’d have to calculate in advance your total out goes for that period apart from the down payment. You’d have to work out the amount keeping in mind the fact that you’d have to pay for the interest that accrues on the loan principal. You’d also have to factor in inflation as your lending agency will keep restructuring your balance debt according to the prevailing inflationary trend. In order that you can keep paying your EMIs, you’d have to set aside a particular amount every month for which you’ll need to save.
4. Another Aspect that’d need Long Term Planning is your Post Retirement Life.
You’d have to figure out well in advance the approximate amount you’d need every month to support yourself after you retire from your job. In this respect, only savings may not be sufficient. You’d have to look for ways of generating extra earnings from your savings and that’d mean parking your superannuation funds in secured government bonds and reliable mutual funds that guarantee high returns.
5. Determine How Much to Save Weekly to Accomplish Your Savings Objectives.
After you’ve a made a list of things you’d be saving money for, you’d be better off determining the amount you’d have to put away every month for achieving your saving ends. Since you’ll be having a limited sum of money at your disposal every month, you’ll have to prepare a budget so that you put aside the required sum without compromising on your indispensable fixed and variable expenses. For big ticket expenditures like a home or a car, you’d find it more convenient to continue paying the monthly accruals if you save a fixed amount periodically.