How many of us have found ourselves running out of money before our next paycheck? Wouldn’t a bigger salary help avoid such situations? Surely it would, but by learning to save money from your existing salary, you can become financially independent faster and save more money for luxuries and investment, even with a relatively smaller salary. Last year’s lockdown has once again shown us the merits of saving money, and it is a crucial skill to learn for all generations.
Here are 10 tips that can help you save money from your salary for the future:
Pay your bills on time
By paying one’s phone, water, electricity, internet and credit card bills on time, one can not only avoid the inconvenience caused by the suspension of these services, but also avoid paying extra late fees on their bill. If you have difficulty remembering due dates, set reminders in your phone and note them down in your calendar, and don’t let these providers profit from your forgetfulness!
Switch to cheaper phone/internet plans.
Since the entry of Jio in the telecom industry, phone plans have become much cheaper, which has enabled customers like us to save more money. Jio and Airtel have started offering additional discounts on their annual plan, such as a free Amazon Prime/Netflix/Hotstar connection with their plan, which can help you save a lot of money than by purchasing each service individually.
Reduce expenditure on underutilized services
Most of households have a newspaper and cable connection out of tradition, even though we watch more content online and can read news online with virtually zero cost. Some people also subscribe to multiple streaming services, such as having both an Amazon Prime Music and Spotify subscription, which doesn’t add as much value as the additional cost. By cutting out on these additional services, one can save money to spend on more essential goods.
Eat healthy and at home
Home cooked food is not only healthier than dining out, but also lighter on the pocket. Packing one’s lunch and avoiding the temptation of junk food can help save a lot on food costs, as well as improve your health significantly. Health is the greatest wealth, and eating home cooked food helps you improve both. It’s a win-win deal.
Minimize fuel costs.
With petrol prices touching Rs. 100 across major cities in India, it is highly imperative to minimize one’s fuel costs to save money. Switching to a higher mileage two-wheeler or four-wheeler can help save a lot of money in the long run. One can also opt for a second-hand vehicle, as aggregators such as cars24 and cardekho conduct inspections and certify cars to avoid quality issues. Travelling in a cost-efficient vehicle today will help you buy the luxury car of your dreams in the future.
Avoid debt as much as possible
Debt carries a high interest burden, and one must avoid debt unless absolutely necessary. Purchasing luxuries and high-cost items on debt may worsen your financial position, and one must be mindful of having enough savings for any type of emergency. If one’s income gets disrupted like in the covid lockdown and he or she is already in debt, then one may have to take on more debt to meet financial obligations, which creates a debt trap. Getting out of debt traps can be very difficult, and hence it is best to avoid debt when one doesn’t absolutely need it.
Minimize spending on vices and addictions
Addictions such as smoking and drinking not only damage your health, but also your wallet. By quitting and minimizing smoking and drinking, you can save a lot of money. Additionally, vices such as gambling are also financially draining, which one must minimize at all costs.
Minimize insurance costs
By comparing insurance costs on websites such as policy bazaar, one can save a lot of money by getting a similar insurance plan with a lower cost. Additionally, if you don’t have insurance, you must consider buying one as it helps save money in the long term. Having a low-cost car, health and life insurance can help you protect you and your family from extra financial difficulties during emergency situations.
Set up automatic saving plans
By having the bank automatically deduct money for savings from your salary, you can develop a disciplined savings approach and earn interest on your savings. Having cash in hand or in the bank account makes it easier to spend and harder to save, and doesn’t earn as much interest as dedicated saving plans such as RDs (Recurring deposits) and SIPs (Systematic Investment Plans).
Pay Yourself First
Last but not at all the least, the best investment for your savings is into your own self. Spend on services that help you increase your earnings potential, such as education and online courses. Utilize your free time to learn new skills and take up freelance jobs, instead of watching content that provides you with no learning or value. Invest in your health and education to receive the best dividends in your life.
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