To save money is one of the most important things in this financial world. It does not matter How much money you are making but it matters How much money you are saving?
For Example, If your friend is making $15,000 and not saving any money, on the other hand, If you are making $5,000 and saves $1000, At the end of the day you are better then your friend according to the financial world.
Here are 10 points you should follow in order to save money
1. BUILD AN EMERGENCY FUND TO SAVE MONEY
Building an emergency fund is a good habit because it helps you in any bad situation that can happen in your life.
Let Suppose If you and your family are at home and you all are watching a movie and suddenly a T.V scene comes which causes your father a heart attack and immediately you take down your father to the hospital
The doctor asks you for fees. Now, what would you do in this situation, If you have no money? There are two ways to collect the money:
Either you go and collect the emergency fund which you saved earlier or you go to someone and borrow from it on an interest basis. Now if you no money then due to pressure of your father’s life you go and borrow from someone.
Now If you would have that saved amount of money, that means you are free from that interest-based money.
2. SAY NO TO DEBT TO SAVE MONEY
This is also one of the important things to keep in mind that you do not go into debt in order to save money.
Debt will ruin all of your money and savings. Debt causes a person a patient of High Blood Pressure and HyperTension.
Let’s look at how many types of debt is
1. Credit Card
2. Student Loan
The average Indian is in debt of $2,219.37 and according to the statistics the number is growing. The charges on an average credit card is 32% and it varies from bank to bank.
Avoid debt as much as you can but in the case where you have to buy a house or you have to study further. In this case, you have no chance but to take a debt,
In this case, Do a side hustle and make some side income and save money and invest it, that can pay off your debt. If you are in college and you are studying on a student loan. Earn at least on the side so that you can pay the debt in the college period of time.
3. PAY OFF CREDIT CARD BILLS EACH MONTH ON TIME
If you are a self-disciplined person, It’s nothing wrong using credit card
Banks give us a service of credit card means when if you do not have any money you can use a credit card with 0% Interest(If you pay the bills on time)
There are some advantages and also the disadvantages of using the credit card. But most of the people are not able to pay the bill on time so the bank charges them a high price.
1. Reward: Most of the credit card gives you rewards, points, discounts and incentives you can earn the rewards and redeem them to make benefits from it
2.Interest free loan: You can get an interest free loan but if you are self-disciplined and you can pay off the bills before the statement period ends.
3. Credit Card is safer: Credit card is safer than carrying cash if you lost your wallet or even being stolen, Your cash is gone but in the case of credit card you can cancel the card immediately
1. High-Interest Rate: I told you that if you don’t pay the loan on the time you will be charged for a lot of money, The average credit card interest rate is 22% and goes up to 40% Now guess how much you pay if you don’t pay the loan on the time
2. Overspending: Credit Card encourages you to overspend if you want to buy something that you really likes the most in this case if you don’t have money chances are you won’t buy it but if you have a credit card in your pocket chances are you buy the product even if the spending limit is over
3. Your credit score: If you do not pay the bills on the time it may affect your credit score, what happens if the credit score is low? Simple, The lower the credit score it’s hard to take the credit next time
Note: In these advantages and disadvantages One thing is common which is discipline. If you use the card with discipline there is nothing wrong with using credit card
4. PAY YOUR SELF FIRST
Most of the people don’t pay themselves. They pay others they pay bills, loan, subscription fee They pay on food, rent and maintenance, etc
Most of the people think that for suppose I am buying a watch for me that means I am paying myself NO! You have to pay yourself by cash
Simply put 10% of your income on the side and save money it until a better investment option
Must Checkout my blog: 9 steps to make a monthly income budget
5. BUY/LIVE IN A SMALLER HOUSE
Buying a smaller house may feel silly to for you. Let me tell you How much cost you will save money if you buy and live a smaller house
1. Low Maintenance: Obviously if you buy a smaller house as compared to the big ones it will cost way less.
2. Easy to customize: A smaller house with smaller rooms can be customized easily.
3. Smaller house is easy to buy and sell: In such a huge population Not everyone has a lot of money to live an expensive house That’s why there is a big market of smaller houses
4. The smaller the house the lower the mortgage: As you know the mortgage rate goes high if you buy a bigger house but in the case of a smaller house. The mortgage payment as well as you can pay it in a short period of time.
6. CANCEL UNUSED GYM MEMBERSHIP TO SAVE MONEY
You see so many people going to the gym in the first few days with full excitement and after some days the excitement lost but your membership fee is being paid each month,
If you are that kind of person cancel the membership and save money today because it doesn’t do anything but waste your money
If you save that money means It is saved each month If you are paying $50 each month on membership means from now you are saving $600 per year
Go to the park instead, jog around the park and lift the weight at home if you wanna be fit.
7. TRACK YOUR SPENDING TO SAVE MONEY
If you have a tight budget It is a great way to save a lot of money because many people spend their money without tracking it
Track your spending by writing it down on a page, If you don’t know where your money is going How would you control and save that money
Here I show you a simple method and that is envelope method
First, write all the expenses in which you spend money, then write down the cost of all expenses, Now make a separate envelopes for each expense Now separate each envelope from another and then spend the money from that envelope, This is how you can track your spending
8. TAKE PUBLIC TRANSPORT TO SAVE MONEY
Public Transport is one of the affordable and best means of going from one place to another. If you are going through your own vehicle, there are a lot of expenses
9. GO TO LIBRARY TO SAVE MONEY
Going to the library is a good habit, If you are going to watch a movie every Saturday/Sunday.
You are doing nothing but waste your time. Going to the library is free and There are a lot of benefits of going to the library and if you have no time to go to the library download E-books and read them,
They will help you to be successful and books helps you to reduce stress levels and reading books means you are utilizing your maximum amount of time and this is a fast way to save money
Now It is your choice What you are choosing
Going to watch a movie where you are doing nothing but wasting your time and money OR Going to the library where you read books to improve yourself save money and utilizing the maximum amount of time without spending a lot of money
First of all, we discussed that you have to build an emergency fund that will help you financially in emergency
and then Do not take a loan because debt is a very big problem Debt can ruin you financially as well as it affects your health, Avoid debt in order to save money
After that We discussed credit card Advantages and disadvantages of credit card
and then we discussed that you should pay yourself first so that money will be saved and invested in different places
After that Live in a smaller house, because the smaller house has a number of advantages like low mortgage payment and low maintenance etc
and then cancel the unused gym membership if you want to live healthy then go to the park and jog there and buy dumbbells to lift weight at home, If your target is bodybuilding then you can go for gym
and then track your spending in order to save money because if you do not know where my money is going you can not save any penny in the pocket
After that you should use public transport, Public Transport is much cheaper than own vehicle and vehicle also occupies the place and costs the maintenance
Go to the library instead of going to watch movie on Sunday
You can use 50/30/20 rule for saving money where you spend 50% on needs and 30% on wants and 20% on savings
You can put your savings on initial level in bank or in FD where your money is secure and growing
You can invest your money in real state, stock market, bonds etc