Friday, January 4, 2019

10 Tips to Save Money and Reduce Expenditure to Boost Savings in Long Term

Someone has wisely said that "one penny saved is one penny earned" while I also believe that one should not compromise on things that they love e.g. spending on family, holidays or smartphones, you can still save a lot of money by following these saving tips. People often say that inflation will eat your money, but there is a bigger threat to your money than inflation, it's unnecessary expenditure. Inflation will take years to erode your money value, but spending can take your money in seconds. Humans are very fickle by nature and given today aggressive advertising campaign then often end up buying stuff, they don't really need. Our focus is to minimize that expenditure to boost your savings.

Many times you have felt that why bought certain stuff, but you realize that it just that moment you wanted that, once that moment passed, there is not really a use or place for that thing. Why were you able to buy that stuff at that moment, because you had surplus money in your pocket or you had a credit card, which gives you a false feeling of owning something without taking the pain of giving money.

Yes, it's true, people will feel more pain and less reluctant to spend if they have to deal with cash, and that's why our smart bankers have introduced credit card or electronic money. I am not saying they are bad, infect they made our life simpler, but it takes a lot of discipline and self-control to only reap benefits and not to fell on their trap. These savings tips are based on my own experience and points I have discussed above, they try to delay the purchase of items to see if you really need it or not, and almost 80% time you end up saving money because you don't really need that.

10 way to Save Money to boost your Savings

Without delaying any further, here are my tips to save money. I also follow same approach and it has really helped me to reduce my expenditure and spend money only there is value.

1) Don't take too many credit Card
The credit card has significantly increased expenditure of one of my friend, he is spending almost 1000$ more than his usual, once he had signed up for too many cards. One time he has almost 5 credit cards from banks like HSBC, Standard Charted, Citibank, ICICI bank and couple of foreign banks like DBS Singapore. When I asked, why he has taken this many credit card, he says that they all come with free gifts like 50$ bonus, free luggage, free stuff etc.

He also says that he is earning travel miles by spending dollars. Wow, isn't it why many people end up taking credit card. I said don't worry about free stuff and travel miles, they are not for earned but to accumulate over the period. I think two credit card is enough for anyone, just in case one is not working, other can be used. Similarly, take one from VISA and other from MASTER to have variety, but never take too many credit card just for the sake of free gifts. You end up spending more and only realizing when you pay the bill but quickly forget after that. Also for people who can't pay the bill on time, credit card charge very high interest rates, so beware.

2) Carry only enough cash on your Purse
This is another powerful saving tips, if you don't haver surplus cash in your pocket, you will think twice before spending. By keeping only enough cash, you automatically rule out unnecessary expenditure. by the way, It's old saying that "the money inside your purse, is the only money you have" but that's not true in today electronic and connected world. With ATM everywhere, you can withdraw money anytime, if you need for a genuine cause. This single tip is so powerful to regulate your spending that you almost always end up saving up to 50-100$ every week.

good Tips to save money and reduce expenditure
3) Top up your Purse every week
This saving practice is the extension of the previous one when you have limited cash in your pocket, I suggest keep money worth a week expenditure and withdraw again on weekends for next week. This will give you an idea, how much you really need for your weekly expenditure and keep your finances healthy and disciplined.

4) Delay purchase of Items by one day
This is another saving tips, which is like catching big fish. No matter, how discipline you are and saving minor bugs on weeks, you often end up spending more on a single purchase of the not-so-necessary item. By following this tip and delaying, something you think is necessary at that moment for a day or two will give you a more clear picture of its importance. In 70-80% cases, it's impulse and you feel saved after delaying the purchase. If it's necessary item then it will make its way after two days because you realize its importance again.

5) Use only one bank account for your monthly expenditure
This saving tip is to keep your finances monitored and tight. By using only one bank account for your monthly expenditure. Almost all the people have more than one bank account, and if you spend some time from HSBC and sometimes from Citibank, you won't get the full picture immediately. Of course, you can do if you are more aware of your finances but not in general. By keeping one account, you can any-time go and see last month transactions to gauge how much you spent last month. If you spending too much, this will keep you in check. I suggest atleast do it twice a month to keep expenditure in check and recover in the later half if you have spent more in the first half of the month.

6) Put your surplus money on Fixed deposit or Invest 
That's another saving tip I suggest to my friends and family members. The more money you keep in your Savings account, accessible by your debit and ATM card, the richer you feel. Subsequently more urge to spend that money. By investing that money in Fixed deposits, you not only earn more interest but also you don't see that money often in your saving account, so you don't feel that urge of spending. It's rare that people by unnecessary items by breaking their fixed deposit, I have not seen it.This is the one tip, which saves big money in long term.

That's all about how to save money in daily life. I am sure these savings tips will help you save some money and reduce your expenditure by delaying purchase of unnecessary items. Since, every one has their own way to save money, I will be thankful if you can share your savings tips. That will help us to benefit from each other. By the way saving is good habit to have and best introduced in childhood, don't forget to buy piggy bank for your child to pass good habit of saving money. By the way these are just 6 saving tips, 4 tips will add when I come to know or may be you can help me on that.

1 comment:

  1. I strongly agree with #3. Bringing limited amount of cash obviously limit your expenses.