When it comes to building a financially secure future, lack of adequate income is never the problem. More often than ever, it is our spending habits that get in the way of our savings. Thankfully there are several money-hacks to boost our savings other than disciplining ourselves with a reasonable spending plan.
Prepare a budget: A great way to stay disciplined about your money is to create a realistic budget with specific goals. It will help you form the habit of saving by analyzing your expenses and highlighting areas you can cut back. A common mistake people make is they create a stringent budget that is tough to follow. A better way is to keep some money aside for fun activities to motivate yourself with a reward occasionally.
Use cash instead of cards: Several studies reveal that people using cards tend to overspend (by 12-18%) than those who use hard cash. Psychology plays a large role here: Every time you see all that cash go, it will pinch you, ensuring you are careful about your spending. So avoid cards and use cash for most of your payments.
Create cash envelopes: Creating cash envelopes for all your monthly utility bills and your indulgences like dining, movie, spa-day etc. is a helpful tool. It alerts you once you have crossed your monthly quota, giving you time to mull over, before allocating more money to that particular indulgence.
Avoid eating out or even take-outs: Not only is it better for your health, but you can also save a bundle every month. A survey revealed that most people tend to overspend on eating out and entertainment, without even realising it. So, no matter how convenient ordering food online is, avoid eating out as much as you can. Skipping a few meals can help you save up to Rs.3,000-4,000 every week.
Take a break from keeping up with others around you: you might find yourself succumbing to social pressures, struggling to keep up with your peers and friends. Not only does this cause you to stress, but it also wreaks havoc on your pockets, especially in this day and age of extreme social awareness.
But there is a way around it. When it comes to big financial choices, the key is to prioritise. Dining at fancy restaurants, holidaying by the beach, hiking etc. can all wait once you have you saved enough for a financially secure future. So, try hard not to let your peers or friends influence you into taking wrongful financial decisions that you will regret later.
Save in advance for big purchases: Let’s assume you need to replace your current refrigerator in the next few months. Since there is no sudden break-down, you can use this knowledge and time to start saving in advance. Create a refrigerator fund and allocate a small portion of your monthly income to it. Not only will it encourage you to save more by cutting down on unnecessary monthly costs, but it won't also seem heavy on the pocket.
Stick to the list while grocery shopping: Yes, most people end up shopping for frivolous items at the market. So try to make an actual detailed list and stick to it. This way, you can avoid impulse purchases and ensure you buy the required quantity.
Pay all your bills before their due date: It is common for service providers to offer a discount for early payments. So, along with saving on the late fee, you might also avail a discount.
Put together your phone, internet, gas, electricity bills can all easily save you Rs.5,000 annually.
Use coupons and loyalty programmes: Yes, Warren Buffett once bought lunch for Bill Gates using a McDonald’s coupon. So, if the world's richest men are not embarrassed to use coupons, there is no reason for you to be.
Every time you stumble upon coupons or discounted deals, take them. It can help you save a good 10% off your annual grocery bills.
Try to use a single airline often to stack up on air miles.
Opt for loyalty programmes, be it at the supermarkets, airlines or credit cards. Most retail chains offer loyalty programs where every purchase comes with a 5-10% discount, which can add up over time.
A common mistake people make is to spend a large chunk of their time on chasing such deals. The key is to maintain a balance, so you get the deal without wasting a lot of your precious time.
Monitor and control your electricity consumption: Replace your old lighting equipment with new energy-saving ones. Switch off not just the equipment but their socket switch as well. These small steps can help you save as much as 20-30% on your electric bill.
If these habits are maintained for a short duration only or just for a month it might not give desired results. But collectively, on an annual basis, you can easily shave off a good 15-20% from your existing household bills.