There are a thousand ways of making money. Most of us manage it effectively. However, saving money is truly an art. Irrespective of the income, being able to make the most out of it is a skill on its own. If you have been struggling to save your hard-earned money, here are 10 tips that will make it easy for you.
1. Plan It All
Planning is under-rated. Once you make it a habit to plan out and divide your income into specific expenses, you will soon realize that it is actually possible to save.
Assign the budget for each expense every month on a specific date. It could be the day before you receive your salary or the first day of the month, or whatever works for you.
Stay within the assigned amount. If you have assigned ‘X’ amount for groceries, you cannot go beyond it for the extra pack of chips. It has to either be accommodated by cutting down on something else or postponed for the next month.
I find it more effective to use a planner or a book and a pen instead of saving it on a computer or phone. It’s tangible and feels more serious.
2. Choose a Finance Head
Every department needs a manager. That’s how organizations handle their vast operations. When you officially make one person responsible for handling money, it is more organized and well-executed.
If you share finances with your spouse, figure out which one of you is better at keeping track of the expenditure. Make it their job to monitor that everyone sticks to the plan.
If you are the sole user of your earnings, you could involve a trusted family member or a friend. This is required only if you have trouble managing it on your own.
3. Cash Over Card
Online shopping is the easiest way to drain your bank account of your money. Ever since the payments got digitalized, binge shopping feels easier and guilt-free.
I recommend using cash on delivery instead of online payments. When you pay by cash, you feel the money being spent. In online payments, the brain somehow does not register the amount of money you have spent. You feel less accountable for the money you have spent.
4. Avoid Impulsive Purchases
Another habit you can inculcate is to avoid making impulsive purchases. If you suddenly feel the urge to buy a red lipstick, add it to the cart and leave it there. A red lipstick is never an emergency. So let it stay there.
In the next 2 or 3 days, it is likely that you will forget it or not desire it as much as you did initially. If this happens, you don’t have to buy it. You end up saving yourself from an impulsive purchase. If your desire persists even after 3-5 days, you can go ahead and make the purchase, provided it is within your budget.
I leave my cart alone for at least a week before I make an actual purchase.
5. Online vs In-store
Buying in stores adds pressure to make an instant purchase because of the salespersons. It’s their job and they are doing it well. But you end up making a purchase you might regret later. Hence, refrain from buying in stores.
Instead, buy online, after taking your time to research the prices. Make an informed decision. It doesn’t matter if it’s just an affordable face-wash or an expensive phone. You can visit stores to experience the product or enjoy window-shopping.
6. Buy When You Are Sure
Most people buy more stuff than they need. For instance, when there are limited-time offers or when you see your favorite influencer reviewing a product, you feel the need to buy things you don’t need.
People also sometimes buy things they don’t like as much, because they need it for an occasion. For instance, if your cousin is getting married in a week, you are more likely to purchase a dress even if you don’t like it that much.
This happens because the urgency of the occasion makes it feel like there is no other option. This purchase will not satisfy you, but you will lose the money. If you are not sure about the outfit in the store, skip the purchase and re-use an old outfit instead. Your satisfaction levels might still be low, but you have at least saved money.
7. Return or Exchange
According to an article in The Cut, written by Melissa Dahl, some people find it difficult to return stuff even if it is a damaged product. This results from social anxiety or to avoid the hassle of going through the return process.
Make it a habit to try on products and examine well to see if they are suitable for you after shopping. If you don’t feel satisfied with the product, return or exchange the product immediately. Hoarding products you don’t use does no good for your wallet.
This habit of returning what doesn’t work for you will add a few glasses to your ocean in your process of saving money.
8. High Quality or Low Quality?
When you buy a product, the quality of the product is the most important aspect. It affects your current and future expenses. Buying a good quality product can be expensive at the moment, but it will end up saving money from replacements or repairs.
However, choosing expensive and high-quality products can be a strain on your wallet. Decide what products need to be of high quality and the ones that don’t have to.
Invest more in products that need to be used several times. For instance, if you are buying a phone, it is advisable to choose an average to good quality phone because it will last you at least 3-4 years without issues.
In clothing, choose a few high quality everyday office or school outfits. Choose classic, multipurpose pieces that you can easily pair with multiple items and wear anytime. A few examples are a pair of basic jeans, a black top, a white top, and black pants.
This rule also applies to shoes and bags. Your everyday shoes in black, white or nude colors are the most used ones. They need to be of good quality. A strong everyday bag can last you a year or two.
Most people don’t prefer repeating partywear outfits several times. Hence, spending too much on them will go in vain. These outfits will not be worn more than a few times, irrespective of the cost. You can also rent your occasional wear, therefore saving money.
9. Diet Plan
When it comes to food, it’s difficult to resist. It is reported that people tend to party and enjoy the meals during the first 2 weeks of the month and then have a hard time managing the rest of the month.
Your favorite restaurant could cost you a lot. Or that extra dessert might push you out of budget. To avoid this, design a diet plan.
You don’t have to prepare a listing of every meal. Decide 2 days of treat meal every week and 5 days of simple, budget-friendly food.
You could choose to have basic or home-cooked food on weekdays and every weekend of treats. This will make sure you don’t feel deprived, yet stay within budget.
Along with all these tips, it is also important to set aside a percentage of your earnings as savings. It is ideal to save 10-20% of your income every month. You can opt for financial policies and investments as well.
What is the one budget tip you practice in your everyday life? Comment down below and share your secret.