Simple ways to save money-It is the basic question of today’s generation.
We all come across so many ups and downs in our life.
Sometimes we have enough money and sometimes we are hand to mouth or even worse.
Money might not be everything but essential part of our life. Financial crunch often leads to stress and disputes with your loved ones.
We can’t guarantee our future but with some careful planning we can at least avoid some worst situations.
Sometimes we know that we are indulging into unnecessary expenses but we choose to avoid to listen to our inner self.
Let’s discuss some tips to save money today to avoid the crisis tomorrow.
1. Save Money for Emergency Fund
It’s never late to start your emergency fund. Choose a portion of your savings to start RD or SIP or any monthly investment plan. With the current situation, there is no guarantee of
job. So you should save at least six months worth of your salary for emergency situations.
Besides emergency fund you should also start your retirement as soon as possible. Remember you are never young to start planning your retirement fund.
So, start planning now and relax in future.
2. Save money by differentiating between need and desire.
Sometimes we don’t remember the difference between need and desire. We tend to purchase things which we don’t actually need.
Stop being materialistic. Before buying it, think do you really need it?
I have seen people rushing to buying new version of their existing phones or tabs. Even though their 6 month old ones work perfectly.
Choose a tenure for your gadgets.
Technology change every minute. So, choose your things wisely.
3. Avoid Credit Cards and save your hard earned money.
People initially used credit cards as a means of emergency. Now credit cards are basic of payment everywhere grocery, school, restaurants, etc.
When we used debit cards or cash , we know our balance and we used it accordingly.
But with credit cards, we often forget that we are supposed to pay it back.
So, I try to avoid the use of credit cards because the interest you might be paying for your late payments might not be worth it.
4. Learn and Earn
You might not be expert in financial field, but there is no harm in learning basics of finance.
After all it’s all about money and savings. So, instead of asking opinions from others you might be able to manage your own portfolio better. There are various ways in which you can save your money according to your needs. They are simple and trust me very interesting. So, make your portfolio and manage it on your own. Learn all pros and cons about SIPs, trading, mutual funds, equity etc
So if a little knowledge might increase your earnings, it’s not a bad decision.
5. Save money by Prepayment of Loans
If you have taken loan or loans whether housing, car or anything, try to complete the payment as soon as possible. It isn’t necessary to pay a huge amount, you can prepay according to your ease. While paying EMI, banks recover their interest in first few years and then the principle amount. So, try to prepay you amount as soon as possible.
For example if you get a good bonus or incentive, try to prepay your loan amount at early stage to avoid heavy interest.
Loans in long term become huge liability and main reason of stress and affects your health.