Five Easy Ways to Improve Your Savings

           Saving is only a matter of habit. If you get into it you can be your own teacher. If you don’t, the world around you is not enough to teach it to you.

               Nevertheless, if you have decided to save and do not know where to start this article may just be right for you. The first mantra in money management is, “A penny saved is a penny earned”!

               It is not only important to start saving when you start earning, it is also equally important to top up the savings as your salary increases. Many of us who know that saving is important fail to top up our saving with time. Calculating the future value of your current saving is very important. This calculation and the lifestyle that you want to have will decide on how much you have to save.

               Here are a few time tested methods that will help you save for the rainy days.

1. Make a start:

The first step in saving is to take the first small step. Take every single step discussed below seriously and implement it faithfully.

• 20% to 25% of your income should go towards saving when you begin your career. If you find this difficult, it will become almost impossible for you to save at a later stage when the pressure of a growing family will assume paramount importance.
• For the beginners, contribution towards the Employee provident fund can be topped up by opening an account in PPF (Public Provident Fund).
• While the EPF is compulsory and is a monthly deduction from your salary, PPF is optional and can be done annually. The PPF though, has a lock-in period of 15 years.
• There are many more options for the Indian investors as they can invest through Post office savings scheme, gold bond, etc. For more details on each of the savings scheme read through the various articles in this site.
• Fix an amount that you wish to save every month and remember to put your eggs in different baskets!

2. Spend in a planned manner so that your savings can improve:

• Once you have started the saving plan, it is easy to stick to it, if you can spend wisely.
• There is a famous saying “Spend and God will give”. On the lighter side, the way our debts build up and we struggle to pay it back makes me wonder if God might go bankrupt soon!
• Getting back to our saving idea, whenever you plan on any expenditure, ensure that you have enough left for the planned saving too.
• Do not postpone your saving or compromise on the plan.
• If you have any major expense in the offing, plan your expense in such a way that you put aside more money towards both the expense and the saving. 

3. Reducing on frivolous expenses is a must:

• The best way to be able to save is to reduce on unnecessary expenses.
• The temptation of variety is the flavour of the era! Understandably, therefore it is difficult to contain our temptation and direct funds towards the expenses. But wisdom should prevail over our desires.
• Splurging excessively on eating outside, buying too many consumer items, parties should be a strict no no!
• To overcome the desire to overspend, a simple suggestion would be to draw up a list.
• Once you list out your needs every month, it is easy to find out what the essentials are and what are not.
• Postpone non-essentials items to the next month and re-draw a budget.
• Doing this every month will ensure that the month in which your expenses are low, will accommodate your non-essential purchase.

4. Limiting the use of credit cards:
After you have successfully itemised your spending needs, you have to follow it religiously. Any amount of emphasis given in this regard seems less. 

If you follow the budget that you have set for yourself, you can plan your expense and withdraw the required amount of money and buy all your essentials using cash. This will ensure that you do not use your credit cards heavily.

 

This will bring down the interest to be paid on the outstanding credit. Then, you can plan all your bulk expenses using your credit card and earn reward points, with which you can buy some of your essentials. In this manner you can reduce your expense without compromising on what you want to buy. But this type of an advantage is only possible if you have planned your expenses and drawn up a neat budget. I have been emphasising on a budget as this is the basis for your financial discipline.

 

5. Hard work and perseverance payoff:

Many a times we are unable to follow the budget plan that we have set for ourselves. We end up over-spending and get into a trap. Understand that such things happen to everyone around you and you are not alone in this large world to make this blunder!

Nevertheless you have to strive hard to pull back your expenses and keep them under control. Remember! perseverance pays off in the end. So work honestly towards the goal that you have set for yourself and little by little ensure that you achieve it. It is only through sheer hard work that you can reach your destination, the fruits of which are always sweet.