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Ways To Save Money On A Tight Budget

IndianMoney.com Research Team | Updated On Friday, July 06,2018, 12:09 PM

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Ways To Save Money On A Tight Budget

 

 

 

Irrespective of how much you earn, you have to save. It is not an option but a compulsion. In fact, you should save first and spend later. Emergencies do not make appointments. They are like uninvited guests, whether you like them or not, you have to serve them.

It is always great to have a budget. This will give you an idea of your exact financial position. It will also give you an idea of how much you CAN spend as opposed to how much you ACTUALLY spend.

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Ways To Save Money On A Tight Budget

 

There are times when the budget is tight. Still, you have to find a way out to start saving money. These are the ways in which you can save money when your budget is tight:

 

1. Do you remember the term ‘automatic’?

 

If you do not have your money in hand, how will you spend it? Simple, isn’t it? Automate your payments like electricity bill, loans EMIs, and so on, within a day or two of your payday. You can give standing instructions to the bank with your savings account for the same. Automate your bills and spare yourself trouble.

Keep in mind, ideally, your savings should be 10% of your salary.

 

2. Set a budget:

 

A budget teaches you to save and spend in a disciplined manner. Therefore, the next step is to draw a budget based on what remains after automatically getting your bills settled. Collect and study your spending patterns. Go through your financial documents like bank statements to get an idea of the source and application of money.

First, jot down your fixed expenses. Next, take a look at your other needs like food, gas, entertainment, and so on. Conclude by fixing a figure for your weekly or monthly expenses and stick to the budget.

 

SEE ALSO: Invest in the Senior Citizen Savings Scheme

 

3. Do you pay yourself?

 

Of course, your employer pays you. But do you pay yourself? Spending first and saving later is a weak strategy. Think twice before doing it. Generally, people have two bank accounts: savings and salary account. Ensure all your bills are paid from your salary account. Transfer the rest to your savings account. As you have drawn your budget already, schedule a weekly or monthly transfer of funds for your expenses, based on the budget figure.

This will cover your expenses.

 

4. Align your savings with your goals:

 

You should always have a goal. Goals give you direction. Therefore, don’t let your money lie idle and name it as ‘general savings fund’. Be clear on the reasons for your savings. You may want to save for an emergency, a vacation or retirement. Once you know your quantum of savings, you will be able to align your savings with goals.

 

5. Save the difference:

 

Shop where you get best deals. Make use of coupons and online sales. Compare and then spend. Save the difference and put that into your savings account.

 

6. Chocolates v/s change:

 

Do not accept chocolates for change. No, it doesn’t make you look like a miser. Demand change and save it in a jar. Deposit the money that accumulates every month into your savings account.

 

7. Can you afford using credit cards?

 

Ask yourself this question. Why buy something that you cannot afford? Worse, why buy it on credit? Credit cards only entangle you into a debt trap. You accumulate debt, pay the minimum balance and incur interest charges. If you use the credit card wisely, you can benefit from it.

You can earn reward points, cash back, and so on. Once you start sticking to your budget, you will start saving more than you ever did. So, stay committed to the cause.

Be Wise, Get Rich. 

 

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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