- First save than spend, says Warrant Buffet. This is a sure-shot way to create wealth.
- Always look for ways to cut corners, allowing more savings each month.
- Always keep aside a certain amount of your salary every month before paying out the bills.
Saving money is a habit. Some people are natural savers, predisposed to spending less and hoarding most of their income. However, others are a little lackadaisical and casual about money. These types of people need a little guidance on how to save money.
Here, we look at 10 tips to save money that will help you fatten your purse:
First save, then spend:
This is one piece of advice that Warren Buffet often gives out to young people when he talks about securing one’s future. Before paying out the bills every month, one should always keep aside a part of the income (which is not less than 10%, however difficult the condition may be) for saving. There is this popular 50/30/20 technique for budgeting, which most people follow. 50% of the monthly income should be spent on the needs, 30% on recreation, and 20% (investing, saving for contingencies, etc.) on the future.
Restrain on payday:
It is a very bad idea to go on a spending spree right after the salary is credited and splurge on non-essential things. A Nationwide’s Payday Saveday study revealed that one in five people spend over half of their spare monthly income within 48 hours of getting the salary. One should always apply restraint during such a time and become conscious. It can be practiced/imbibed over a period.
Start investing your saved money:
A person is not wealthy by the coins he carries in his wallet, but it is the income his savings generate on a regular basis. Mere stashing some amount of money every month is not going to get you too far, although it is also a worthwhile habit to consider. Investing your money wisely with guidance from experts can help people beat any inflation in life.
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Keep a close watch on the spending:
Keeping track of one’s expenses by writing them down will help identify the holes that need to be plugged. This is a sure-shot way of making amends and bringing the finance on track. It also builds a consistent habit of saving money by bringing the element of conscious spending.
Always have a clear demarcation of wants and needs:
“If you buy something which you do not need, one day you will have to sell what you need”, another piece of invaluable advice from Buffet. One should always prioritize what are the essential needs and what are wants and good to have stuff. Budget allocation should always be for needs. The wants can wait until a budget is created over months.
Curtail eating out or ordering food from outside:
Without realizing it, people end up spending a huge amount on eating out or ordering from outside. At the end of the year, it would amount to such a startling figure that it always surprises people. This could easily go to one’s savings. An occasional indulgence is perfectly fine, but often, this becomes a habit or compulsion that consumes a considerable amount of one’s earnings.
Always look for ways to save more by cutting corners:
One should always be on the lookout for ways to cut expenses so that some extra money can go to savings. That extra dollar or two every month will add up to a substantial amount, giving you more motivation to save more.
Always buy quality and expensive stuff when it is marked down:
It is not a crime to long for that expensive pair of sneakers or stilettos on the higher side of the scale. However, if you must buy costly and branded items, watch out for company announcements and news on sale timings. It is advisable to buy those expensive items during their sale so that you get quality merchandise at cheap prices. This allows you a considerable amount of savings.
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Have no spending days in the month:
This is an exercise and habit which can be inculcated. Have no spending days in the month when you go without buying anything. This will develop a sense of accomplishment and give you more encouragement to save money.
Money comes more easily to the person who saves a certain part of the earnings. On the other hand, for the person whose purse is empty money seldom comes. These are the golden lines of a famous book on personal finance written 100 years ago but still, hold true. Savings attract more savings and spending attracts penury.