Everything is a futile exercise if you decide to proceed without any target.
We cannot rule out the fact that recreation is absolutely necessary
The one thing that a middle-class individual almost always dreams of is savings. The dream does not remain limited to just that but extends to his/her hopes of maximizing savings to the highest extent possible. Lucrative, as it sounds, maximizing one’s savings is in the truest sense of the term a gargantuan task. But once you learn all the little tricks and tips, not only will savings be easy, but also you would be able to live your life with a little less worrying.
You must be wondering if it is really that simple, and in order to believe it, take a look at all the simple tips, tricks and hacks that will make savings really easy for you.
1. Set a target and a budget and stick to it
Everything is a futile exercise if you decide to proceed without any target. So every time, at the beginning of the month, set an expenditure and savings target for yourself. Remember not to be too harsh but also remember not to cut too loose. After you have set this target for yourself, it is essential that you lay down a firm budget for yourself. For example, if 60% of your salary accounts for expenditure, plan your budget out accordingly and try to abide by it. One of the most effective budgets is the 50/30/20 budget. As the name suggests, 50% of your income is for your necessities, 30% is for your wants, and the remaining 20% is for your savings.
2. Pay the bills off first
The one text that lifts your mood up the most is no doubt the one that says that your salary has been credited to your account. Needless to say, this could tempt you to make unproductive expenses that go against your savings regime. But wait. Pause, and think again. The scheme is to prioritize and pay. So, start off by paying all those bills – gas, electricity, water, rent and everything else. Congratulations, now you have successfully taken your first step towards maximizing your savings!
3. Set aside an emergency fund as soon as possible
The next thing that you could and should do is set aside an emergency fund. You must remember that emergencies can catch anybody unawares and it is absolutely necessary to put aside some money for any such purposes. It is recommended that you keep 5-10% of your salary aside for such contingencies each month.
4. Envelopes for indulging
We cannot rule out the fact that recreation is absolutely necessary for everyone’s survival, and more often than not, it comes at a cost. So, make a few envelopes for each activity – like shopping, eating out, etc., and put in some money inside each. Make sure that you remember the fact that this is your allotment for the entire month. This habit could reinforce savings and will prevent you from spending more than you should.
5. Invest in various sectors
It is essential to save wisely if you want to maximize your savings. And the best way to do so is to invest in not one, not two, but several sectors in order to safeguard your hard-earned money. Out of your total savings, invest some amounts in mutual funds, some in real estate, some in the stock market, and finally, deposit the rest in the bank. With your money spread out over a wide spectrum, you will not have to worry about losing everything when a particular market crashes. With a part of your savings safe and secure in the bank, you could breathe a sigh of relief.
6. Pay your loans off wisely
In the present day there is hardly any earning man who has not availed a loan ever in his life. In most cases, a person has several loans and debts to pay off and only when you handle them smartly, will you be able to maximize your savings to the fullest extent. Suppose you have 3 long term loans, A, B, C, to pay off, one lasting 2, the others 5 and 10 years, respectively. You start off by paying all three simultaneously. After 2 years, when loan A ends, imagine that it is still ongoing and keep paying for the other two with an increased amount. When the next loan ends, imagine you still have 3 active loans and continue paying the same total amount for your last remaining loan. This way, you will be able to pay your debts off faster, and that would ensure that you would have more savings later on.
7. Use some apps to keep track of your expenditures
In this era of highly smart smartphones, keeping track of anything is never a problem. There are several apps like ‘Money Manager Expense & Budget’ that will help you to not only keep track of your expenses but will also help you to fix a proper budget for yourself. The tracking will always be hassle-free, and only a click away.
8. Say “no” to useless subscriptions
It is okay to be impulsive with subscriptions at times, but when they start to take a major toll on your budget, it is time that you cut them down. Start by identifying all the subscriptions that are not useful for you anymore and cut them off without any further dilemma.
Apart from all the major things that you could do in order to maximize your savings, there are some little things you could do too. Make a list for grocery shopping and stick to it, cook your own food, make your own coffee, avoid credit cards, etc. Remember that what you save today could make your life a little easier tomorrow.
So, why not start from today itself!
That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.
(About Author: Arindom is a professional writer, editor, blogger and a member of the International Association of Professional Writers and Editors, New York. A management postgraduate in finance with extensive industry exposure, he is associated with many reputed global online magazines and publications as a regular contributor. He loves to help his readers writing highly informative and well-researched investment-related content to make informed decisions.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of organization)
With this one can say “Mutual Fund Sahi hai”, so let me do Nivesh / Enquire
