- Date : 05/02/2020
- Read: 3 mins
You don't need to earn lots of money to build wealth. You only need to save it wisely.
With inflation and expenses on a steady rise, it is difficult to save money and invest for a stable financial future. If you are worried about not having enough savings, here are some easy hacks you can deploy.
1. Make yourself the priority
Living from paycheck to paycheck? Consider reversing the process. Instead of paying your bills first, how about making a commitment to pay yourself first? Create separate accounts or Systematic Investment Plans (SIPs) for various long-, medium-, and short-term goals such as retirement, setting up an emergency fund, or even fun goals such as buying a new gadget or going on a vacation. This will result in forced savings.
2. Bring back the piggy bank
Remember how you would scrounge for coins or pester your parents for loose change? Each rupee you saved back then made its way to your piggy bank. How about bringing the piggy bank back in fashion? Make it a habit to empty any change and small notes in your wallet into a big jar. In fact, you could turn it into a family activity, where each member makes it a point to put something into the jar every day. The amount you save by the end of the year might surprise you.
3. Don’t squander your raise
Getting a decent raise is a validation of your hard work. Instead of rewarding yourself with yet another purchase, direct it towards your savings. If your contingency fund is not enough to take care of at least 6-12 months of expenses, think of augmenting this first. Or consider enhancing your insurance cover, or put an amount towards your retirement savings. Spending your raise on yet another gadget is as good as squandering it!
4. Retain the habit of EMI payment
Just finished paying the last EMI on your vehicle or personal loan? As tempting as it may seem to celebrate this windfall, trick yourself into believing you must continue to make EMI payments. A smart thing to do is to redirect the money to your investment accounts. If you continue with the habit of force-saving the ex-EMI amount, you will be surprised by what you can save in a few years.
5. Make your extra money work for you
It’s a great feeling to have some spare money. For instance, you may have received a sizeable tax refund or a cash bonus at work. It would be prudent to put this money towards savings rather than fritter it away. But it’s only human to reward yourself with something nice, so maybe you could split the money and invest one half while you buy yourself something nice with the other half!
To sum up
You don’t have to earn big money to be able to save efficiently. Using these easy hacks to save better will help you gain better control over your finances in a short period and give you the confidence to create wealth in the long term.